It thought it would be useful to do a bit of a ‘mythbusters’ column. I keep hearing a regular list of issues with Auckland Council, some of these are actually issues with our previous local council in its various forms over the last 50 years, some are more recent.
One of the most common ones I come across is “we’re not getting our fair share of rates”. Always a problematic one as does this mean what I pay being spent right outside my front door? The township? or district? Some residents of Wellsford define things as anything north of dome valley for example, I tend to look at things in terms of Rodney Local Board area that I have been elected to represent.
So are we getting back into Rodney what we pay to Auckland Council in rates? It would appear so, in fact we are ahead, clocking up an additional $20 million of investment in Rodney this year above the rates contribution (just don’t tell the rest of Auckland that!!!).
This is really not too surprising. No one should forget the double figure rates increases under Rodney District Council which struggled with a tiny population that was rated to finance a huge areas infrastructure. Watercare alone is now pouring hundreds of millions into failing infrastructure across Rodney and the new Auckland Transport budget is signalling a spend of over $700 million in Rodney over the next decade including an unprecedented $121 million in road sealing. Between AT and NZTA over $70 million is being spent over the next three years just of the section of SH16 from Brigham Creek to Waimauku. So are we getting back what we pay in rates in Rodney? It would appear so.
Another chestnut is the “Council has an unsustainable debt level”…
Rodney District Council struggled with its finances evidenced by bringing one of the highest level of debt of any legacy council into Auckland Council on amalgamation it may well be that this legacy is why this comes up.
Auckland Council has actually been a prudent borrower, don’t take my word for it, Standard and Poors give Auckland Council a AA rating and Moody’s a Aa2 rating. Borrowing to fund capital investment in infrastructure, which is what Council does, is a perfectly logical way of financing it’s capital spending, the government does it, and in fact so do other councils and governments across the world. The idea that council has unsustainable debt levels isn’t born out by the facts, objectively looking at other similar sized corporations or government entities it’s quite normal. Council generally doesn’t splash it’s capital spend around on pointless stuff*, since I’ve been on Council I’ve seen the lid come down on capital spending and more of a focus on core business. Operational spending is slightly different and there will always be areas where this could be done better or the value is debatable, council needs to constantly be vigilant to ensure it delivers value for it’s ratepayers.
And finally, “Council is wasting billions on a tram system to the Airport and North West”. Council is not spending money on light rail. Both proposed light rail projects in Auckland are Central Government ones and funded primarily by NZTA a government agency. In the case of the proposed North West light rail project government has pledged $2b but needs the rest of the money to come from private investors. Again, don’t take my word for it, a quick google will show this is an NZTA/Government, not Council, project.
*update… although maybe I should have excluded things like the America’s Cup which while it has some downstream infrastructure benefits, doesn’t seem like a burning priority for the city, and there are other examples…