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INL Digital Edition August 1, 2020

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AUGUST 1, <strong>2020</strong><br />

Homelink<br />

Action Plan to rescue Auckland from Covid-19 impact<br />

Phil Goff<br />

The impact of Covid-19<br />

on our City has been<br />

dramatic, with the full<br />

economic effects still to<br />

be felt.<br />

The good news is that, by<br />

working together, we stopped<br />

the community spread of the<br />

virus, saving potentially thousands<br />

of lives and preventing<br />

our hospitals from being<br />

overwhelmed.<br />

However, the economic<br />

cost of the virus, causing the<br />

lockdown and worldwide<br />

recession, is high, not least the<br />

effect on Auckland Council’s<br />

finances.<br />

Emergency Budget<br />

Council income has been<br />

slashed by nearly $500 million,<br />

meaning that we need to dramatically<br />

cut our expenditure.<br />

That is why the Council has<br />

had to pass an Emergency<br />

Budget.<br />

Since the budget went out<br />

for public consultation; on top<br />

of that we have also had to<br />

find a further $224 million to<br />

pay for new infrastructure to<br />

increase water supply.<br />

After this year’s worst-ever<br />

drought, the Met Service<br />

forecast is for a drier spring<br />

and summer, with the risk<br />

of severe water restrictions.<br />

Few in Auckland would<br />

question the need to make this<br />

If Auckland succeeds, rest of New Zealand will prosper (Auckland Council Picture)<br />

investment, so the money has<br />

to be found.<br />

The Emergency Budget is<br />

the most challenging budget<br />

Auckland Council has ever<br />

faced.<br />

We have had to balance<br />

the need to cut spending with<br />

the need to protect the vital<br />

services we provide for Aucklanders<br />

and keep as much<br />

as we can the investment we<br />

need to make in infrastructure<br />

to match future population<br />

growth.<br />

We cannot just borrow to<br />

pay for all of this. If we do<br />

not manage our finances<br />

prudently, we risk losing our<br />

credit rating, adding hundreds<br />

of millions of dollars in higher<br />

interest rates and putting<br />

the debt unfairly on future<br />

generations.<br />

Curtailing expenditure<br />

The first thing we did was to<br />

cut our spending.<br />

Staffing has already been<br />

cut, with over 600 temporary<br />

and contract workers going.<br />

Another 500 permanent jobs<br />

will also be lost. Any non-essential<br />

services have had to be<br />

cut back.<br />

The Council must become a<br />

smaller and leaner organisation<br />

that does more with less.<br />

Council spending has been cut<br />

by more than $200 million.<br />

Secondly, we will sell<br />

surplus property to the value<br />

of around $220 million and<br />

use that capital to avoid<br />

cutting infrastructure projects.<br />

There is no better time than a<br />

recession to spend money on<br />

building for the future, while<br />

stimulating economic recovery<br />

and creating new jobs in the<br />

construction industry.<br />

Infrastructure investment<br />

By careful management of<br />

our budget, we will invest this<br />

year over $2.2 billion in new<br />

infrastructure, more than<br />

the average of $1.6 billion<br />

spent annually over the past<br />

five years.<br />

And while some services<br />

have had to be trimmed<br />

back, we will continue to<br />

provide critical and valuable<br />

council services like public<br />

transport, libraries and<br />

community facilities, parks<br />

and playgrounds, and waste<br />

and recycling services.<br />

The loss of nearly $500<br />

million in income is the<br />

equivalent of a rates cut of<br />

around 28%.<br />

As a result, we will need<br />

to leave in place an average<br />

general rates rise of 3.5%, as<br />

originally announced. While<br />

we would have liked to cut<br />

that, the cost in terms of lost<br />

services and infrastructure<br />

was too great.<br />

Rates increase<br />

The difference between<br />

a 2.5% and a 3.5% rates<br />

increase for the owner of a<br />

$1 million property paying<br />

the average general rate<br />

is around 47 cents a week<br />

more for the higher rate.<br />

The lower rate would,<br />

however, have slashed<br />

spending by another<br />

$17 million and cut our<br />

investment in infrastructure<br />

by $60 million.<br />

Instead of a general<br />

● First Home<br />

● Investment Property<br />

● Residential or Commercial<br />

● Building / Extending / Renovating<br />

● Re-Finance/ Restructure<br />

● Buying an Apartment<br />

● Low Deposit<br />

● Self Employed<br />

● Business Loan<br />

● Property Development<br />

For all your home loan and insurance needs talk to us...<br />

Rakesh Bansal Era Bansal Manisha Kumar Jatinder Singh<br />

021 030 8135 021 066 7598<br />

021 154 4327<br />

info@kiwimortgages.net.nz era@kiwimortgages.net.nz<br />

Jatinder@kiwimortgages.net.nz<br />

Ex-Banker for years<br />

Ex-Banker for years<br />

Toll Free:<br />

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116b,Cavendish Drive, Manukau City E:info@kiwimortgages.net.nz | w:www.kiwimortgages.net.nz<br />

03<br />

rates cut, we have targeted<br />

support to those facing real<br />

hardship because of Covid-19,<br />

putting aside $50 million<br />

to allow postponement<br />

of rates without penalty.<br />

It was a tough budget to<br />

put together, but in the end<br />

all 21 local boards and the<br />

overwhelming majority of<br />

Councillors came together<br />

to agree on a budget that<br />

best serves the people of<br />

Auckland, now and for the<br />

future.<br />

Phil Goff is Mayor of Auckland.<br />

He writes a regular column in<br />

Indian Newslink<br />

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