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Auckland Council’s finances have perked up, with its operating surplus rising by $142 million, but the improvement hasn’t cleared the storm clouds hanging over the grim budget currently being prepared.
The council’s half-year report shows revenue up by $444 million compared with 12 months earlier, while costs rose by a smaller $302 million.
However, the council has warned that the improvement was bolstered by one-offs such as the $81m from the government for the Three Water Reforms, and $48m of extra government money for public transport.
On the plus side, the revenue was also driven by fee and user charge income up $134m on the previous year, and $29m of higher revenue for Ports of Auckland.
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Costs were boosted by a $34m higher wage bill, and public transport costs up $53m.
Headwinds have since increased, with the weather emergencies likely to hit the finances for the second six months through to July, and the forecast remains for a $295 million deficit needing to be closed in next year’s budget, which has just begun public consultation.
Jason Dorday/Stuff
Flooding in Kumeu during Cyclone Gabrielle, the latest in a series of disastrous summer storms to hit the Auckland region. Planners and developers have failed to properly consider climate change, and a planned law change could allow such failure to continue, argues Teall Crossen.
“The devastating and tragic storm and cyclone that hit Tāmaki Makaurau from 27 January 2023 have taken the challenge of the group’s financial situation even further,” said the mayor Wayne Brown in a statement.
“It is too early to know the exact costs of these events, but they will add additional costs in the second half of the financial year,” he said.
The chief executive Jim Stabback, who will leave in six months, said there was no doubt the financial pressure on the council’s books was growing.
“This was evident in higher interest costs related to unhedged debt, the pressure on wage and salary expenses and increases in the cost of goods and services,” said Stabback.
The mix of budget proposals for next year include a 4.6% average rates rise, cost cuts of $130 million, and a possible sale of all or part of the council’s airport shareholding worth $2 billion.
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