Sandra Coney – The Mayor’s Budget 2023/24
“Look on my Works, ye Mighty, and despair!” *
The Auckland Council is currently consulting on the proposed Mayor’s Budget 2023/24 which makes enormous cuts in funding for community, the arts and environment.
This proposal is now out for consultation. It is critical that individuals, groups and community make their voices heard through this process.
You have until 11 pm 28 March to make a submission at akhaveyoursay.nz/budget. You can fill in a form or write your submission any way you like.
There is also the opportunity on Thursday 16 March to talk to the Waitakere Ranges Local Board in person.
This paper is an attempt to show succinctly what the Mayor’s Budget means for the Waitakere Ranges Local Board area. It has been enormously difficult to extract concrete information from Council, so this is not as complete as I had hoped. I have been unable, for instance, to find out detail about what the cuts mean for regional Environmental Services, which is key for this area.
The Council’s budget has two parts: regional spending governed by the Governing Body (the elected councillors), and Local Board budgets, for local activities. There are also sums that go to CCOs such as Auckland Transport and Watercare. These come out of regional budgets.
The Mayor’s proposed budget will increase the rates by 4.66% – or 5.66% if an additional $20 million is added for future response to storms. This is less that the rate of inflation which is 7.2% (as of 11 March 2023).
I’m going to concentrate in this paper on the environment, but will cover some information about community and the arts.
The Mayor’s Budget and weather catastrophes
Although it has not been adequately explained, Auckland Council is in deep financial trouble. The Mayor blames decisions made before he came along and stresses it is not of his making.
The Mayor says there is a shortfall of $295 million for the coming financial year. He proposes to make substantial cuts in administration and services, increase borrowing, and sell assets, even income-earning ones such as airport shares.
This comes hard on the heels of extensive flooding in some parts of Auckland, and catastrophic damage to many areas from Cyclone Gabrielle. The Mayor has not revisited his budget in the light of this tragedy to see what funds are needed to repair damage to public assets such as parks and to support community action to rebuild. The damage to the Waitakere Ranges Regional Park, for instance, will run into millions and only built infrastructure is covered by insurance.
Instead, the Mayor proposes a possible budget increase of $20 million to address future storms, but this sum seems as if it was plucked out of the air, rather than quantified. Essentially, the Mayor’s budget predates these weather events.
What is worse, it comes at the very time we need all our volunteer environmental groups and NGOs to throw themselves into the repair and restoration. If there’s one thing the events of the past months have shown us, it’s that we need to have healthy waterways and natural areas to cope with climatic events and we will look to our community groups to help with that work.
But that is exactly who will bear the brunt of the Mayor’s cuts. Support to environmental groups, such as regional grants for coordination, have been cut entirely. Then the Mayor has taken his knife to local boards where much of the funding for community and environmental action comes from.
Cuts to Local Boards
Some $16 million of total savings are proposed to come through 5% cuts to Local Boards.
The Waitakere Ranges Local Board is one of the hardest hit boards by this proposal and the way it has been calculated. The actual cut in the WRLB area is more like 10%. The chair of the WRLB, Greg Presland, points out that:
”[T]he means of calculating the loss means that the cuts are not evenly spread throughout the region. Per head of population this local board’s cuts are in the vicinity of $13.70 per year. In Howick and Kaipatiki (both $7.21) and in Orakei ($7.29) things are not nearly as bad.”
The claim of 5% cuts also hides that the cuts are not top-sliced off all budget lines. The total sum must come out of the operational budgets that fund community action, grants and environment and for operating our built assets such as libraries and halls.
There are two budget lines the cuts will have to come from: LDI and ABS. LDI stands for Local Discretionary Initiatives; ABS is Asset Based Services. LDI is where most of the WRLB environmental spending and support for community comes. The total LDI operational budget for WRLB is $1,332,400.
ABS is the operational funding for running Council-owned assets such as parks, libraries and community houses. The Board’s total operational ABS is $10,233,000.
The big items in the Board’s ABS are parks’ maintenance at $3,300,000, the running of Te Uru at $719,000, which is a major arts facility which brings a great deal of benefit to Titirangi and more widely, and libraries at $980,000 – the two libraries at Glen Eden and Titirangi with contributions to community-run libraries at Waiatarua and Piha.
The Board cannot make savings out of the parks’ maintenance. That’s because head office has decided that savings from cuts in these budgets are being taken regionally. Instead, the Local Boards are being directed to take all the savings out of the remainder of ABS and LDI and these are the ones the community depends on.
Generally, the WRLB does not have a lot of Council-owned assets from which to extract cuts. The WRLB is mainly made up of natural areas, including the largest area of indigenous forest in Auckland, mostly the 17,000 hectare regional park but also surrounding privately owned forest. Much of the Board budget goes towards keeping these surrounding areas healthy and controlling pest plants on private land. Amounts in the regional budgets carry out work such as possum and pest plant control in the parks themselves, including funding which comes from the NETR (see below).
The NETR and WQTR
Back in 2018, the Council instituted two regional targeted rates, the Natural Environment Targetted Rate or NETR and the Water Quality Targetted Rate or WQTR. A targeted rate means that it cannot be used for any other purpose than that for which it was collected. You’ll find these rates listed separately on your rates demand. The implementation of these rates followed extensive consultation with the Auckland public who supported the idea.
These rates were to beef up spending in the environment. There is still a base amount that is spent on the environment that comes out of the general rate. The NETR and WQTR were put in place to expand and speed up work on the environment and water quality.
I’m going to focus here on the NETR because this was very important to Waitakere. $33 million was to be collected each year. This was to be spent on 48% protecting our regional parks; 36% kauri dieback; 9% expand community and school action; and small amounts to regional biosecurity, marine ecology, region-wide biodiversity etc.
The Mayor proposes to cut both these rates by two-thirds for 2023/24 or probably future years. This is intended to help keep the overall rate increase down. To offset these cuts, the Mayor proposes that “reserves” of these funds will be used to top them up. In his words: ”But don’t worry, the activity under NETR and WQTR won’t stop. We have reserves in those targeted rate funds to carry on the planned activity for the 2023/2024 year.”
It turns out that in each year since they were instituted, not all the NETR and WQTR was spent on the purposes for which it was collected. In each year about $6-11 million of the amount collected was not spent and stayed in the bank which would have helped balance regional budgets. The reasons given for not spending all the NETR and WQTR are Covid, lack of staff and contractor capacity. In other words, spending on the environment and water quality was short-changed for four years.
The total amount of the NETR reserve is $20 million. The Council environment department planned to spend these reserves in the current year – $6.3 million – and future years, on top of the $33 million collected each year.
But this is not what is intended by the Mayor. A two-thirds cut, means the NETR collected in 2023/24 would be about $11 million instead of $33 million. To reach the budgeted $33 million, all the reserves would be used in one year and then still be short by about $2 million. Cumulatively, this amounts to short-changing the NETR spend by $22 million.
The NETR reserves should be spent on the environment and there should be 100% collection of the NETR for 2023/24.
Other environmental cuts
Information about cuts to base regional environmental budgets has not been forthcoming. The Mayor’s proposal says broadly there will be “reductions in regional environmental services”, but these are not specified nor their dollar value given. It seems that not all environmental programmes would be funded, the planned expansion of the pest plant programme would not occur, other programmes and services would be “paused”. It is also likely that there will be cuts in regional parks spending, which is where almost all the Council-owned natural areas are located.
The Mayor’s proposal does specify the following will be cut, although the wording is once again very vague:
- Services at Arataki Visitor Centre in Scenic Drive – it is not clear how deep these cuts are and there are suggestions Arataki may close
- School programmes on environmental issues
- Regional community and education programmes
- Outdoor experiences for young people
- Regional climate action grants
- Regional environmental, natural heritage and historic heritage grants.
This last item includes the Regional Environment and Natural Heritage Fund which many environmental groups depend on. On top of this, the Local Board is unlikely to have funds for grants. This means that collectively, with reduced NETR spending, reduced WQTR spending, unknown cuts in environmental budgets, regional environmental grants cut, and Local Board grants cut, there is next to nothing available for community environmental action.
The cumulative loss to environmental action will be immense and hard to recover from. Groups that lose a coordinator, will be hard-pressed to get back to this stage again. In the meantime, the possums and rats will reproduce, the weeds will multiple and environmental restoration will go backwards.
The Mayor proposes to sell all the Council’s 18% shareholding in Auckland Airport. These shares were inherited from legacy Councils at amalgamation. Arguments against this are that once sold, they can never be retrieved, and that most cities maintain an interest in such a strategic asset. The Mayor makes much of the lack of dividends for the last three years during Covid, but ignores the capital gain of the shares, earlier dividends and projected future dividends.
Writing in the Herald, Kushlan Sugathapala showed that while the Council did not receive the expected airport dividends during Covid, the value of the shares has more than tripled from 2011 to 2018, from $632 million to $1.8 billion, a capital gain of $1.2 billion in 7 years. With dividends and a share buyback, a total gain to Council of $1.7 billion in eight years from 2011 to 2019. The airport is estimated to pay Council a dividend of around $30 million this year.[i]
The Council does have other options which briefly are:
- An increase in rates – the current proposal is less than inflation
- Greater borrowing, the Council’s assets and credit rating would allow this. The Mayor proposes $75 million borrowing but even using Council’s very conservative approach it could safely be up to $140 million.
- Cuts in administration greater than those proposed and less use of costly out-sourced contractors. Generally this is a hidden area as far as constituents are concerned.
- Bringing more services in-house rather than out-sourcing.
Points to make in your submission
The WRLB Local Board Chair Greg Presland has suggested people making submissions might want to make these points:
- Rates should increase to the current rate of inflation (7.2%). Anything less than this is a net cut at a time when the repair job for Auckland is of utmost importance.
- You oppose cuts to local board funding. If there are to be cuts to local board funding these cuts should be shared equally between all local boards.
- You oppose cuts to environmental services. If there is one thing that recent events has shown it is how threatened our environment is and how much we rely on it. Now is the time to enhance environmental protection, not degrade it.
- You oppose cuts to community groups. These groups perform a great deal of good and cutting their funding at a time where community resilience is at a premium is a retrograde step to take.
- You oppose cuts to the Arts Sector. Out west the Arts are a major contributor to our quality of life as well as a huge benefit to the local economy. Council’s investment in this area has direct tangible social and economic effects. We cut support at our peril.
- As far as possible debt should be used to fund all activities where there is a long term benefit.
- You oppose the sale of Airport Shares. These will start paying dividends again later this year and are appreciating in value. Selling them now will cost us in the long term.
To these I would add:
- You oppose 2/3 cuts in NETR and WQTR
- You oppose the use NETR and WQTR reserves to partly plug the gap
The Local Board’s LDI and ABS where cuts are expected to be made
To just to give you an idea of what those budgets include, its things like the list below:
- South Titirangi Restoration LDI $15,000
- Pest Free Waitakere Ranges Alliance Coordinator LDI $75,000
- Climate Action Programme LDI $40,000
- Ecomatters native plant nursery LDI $11,550
- Ecomatters Ecofest Festival LDI $11,600
- Ecomatters centre LDI $40,500
- Ecomatters Love Your Neighbourhood LDI $11,600
- Love Your Place Environment Awards LDI $5,800
- War on Weeds LDI $26,600
- Eco-volunteers in parks LDI $45,000
- West Coast Animal Management Team LDI $35,000
- Community Weed Bins LDI $96,056
- Bufferzone Weed Project (working with private land owners next to regional parks) ABS $50,000
- Our Backyard – plant pest control in Waitakeres, attracts extra regional fund LDI $100,000
- Surveying West Coast shorebirds LDI $7000
- WRHA Welcome Pack LDI $13,500
- Project Twin Streams maintenance ABS $246,000
- Community grants LDI $75,000
- Anzac Services LDI $5,000
- Libraries ABS $981.292
- Living wage – top up for workers at Community Houses LDI $25,000
- Community halls – grants to communities who own or run halls LDI $42,000
- Civil Defence emergency resilience LDI $25,000
- Pasifika youth programme LDI $15,000
- Youth Connections LDI $25,000
- Youth programme LDI $20,000
- Hoani Waititi Marae ABS $75,000
- Glen Eden and Titirangi Community Houses ABS $88,000
- Free community booking GE library LDI $3500
- Community Waitakere LDI $32,000
- Maori broker/engagement LDI $35,000
- Neighbours Day grants LDI $6,000
- Lopdell Precinct ABS $153,166
- Te Uru operational grant ABS $684,536
- McCahon House ABS $23,053
- West Coast Gallery ABS $15,962
- Upstairs Gallery ABS $51,589
- Shadbolt House ABS $10,373
- Glen Eden Playhouse ABS $18,520
- Open Studios ABS LDI $33,000
- Community Arts Programme $19,000
- Going West Festival LDI $60,000
- Heritage Conference LDI $22,000
*This has been written in my personal capacity and is not a Board document + Percy Bysshe Shelley’s Ozymandias
Sandra Coney QSO – Member of the Waitakere Ranges Local Board
[i] NZH 6 March 2023, p A23