Opinion: Auckland Mayor Wayne Brown is a man of fixed ideas pursued relentlessly. Two problems arise. None of his ideas are strategic; and anyway, he lacks the personal and political skills to sell them to councillors and citizens.
Both failings dominated his unveiling yesterday of his “Final Budget Proposal”. His three biggest ideas are to sell the council’s shares in Auckland airport; “to stop the waste” in council spending; and permanently lower the council’s borrowing limit.
This is a “financial reset for long-term benefits”, he said.
But it’s neither a reset nor beneficial long-term. The three actions will take some immediate pressure off council finances. But the council will remain as cash-strapped as ever. Brown’s style of financial management won’t help the council help Aucklanders develop the city’s potential.
Take the airport shares. Brown says selling them to pay down debt will save the council $100 million a year in interest payments, money it will spend on other things in its budget.
But the 266 million shares are an asset. They were worth $2.11 each when Auckland Council was formed in 2010; and they’re now worth $8.88 – a capital gain of $1.8 billion for the council.
The council will only reinvest $200m of the sale proceeds to fund completion of community projects such as the upgrade of Manurewa’s War Memorial Park.
Using the other $1.6b or so to pay off some council debt will reduce its debt-to-revenue ratio from just under 250 percent to slightly below 210 percent.
But from this lower base, Brown is still advocating for an extra $100m in council debt in the financial year beginning July 1. The debt-to-revenue ratio will rise slightly until fiscal 2027 before declining a little by fiscal 2031 as the council perpetuates its spending patterns.
If he was a strategic mayor, he would reinvest the share-sale proceeds in targeted capital projects to help tackle the city’s climate crisis and improve its storm resilience. Those solutions in turn would generate greater economic and environmental wellbeing.
His goals to reduce wasteful spending and lower the debt limit are equally tactical. One will generate a little more cash to spend productively; the other will constrain the city’s ability to borrow to make big, long-term investments in its future. Neither is strategic.
Brown’s obsessive nano-management of finances was evident in his budget press conference yesterday. He revelled in tiny details such as the $62,000 the council had spent on walking tours of the city, which attracted only 52 customers. The budget document included four pages of some 40 spending cuts with sums as small as $100,000.
His draft budget proposed $125m of spending cuts in the coming financial year whereas the final version had only $74m. That was mainly because Brown gave up on cutting $16m from local board budgets – “I’ve got to trade to get things across,” he said.
Similarly, he rescinded a range of cuts in community, cultural and other areas of spending after many people spoke up for the activities.
Brown also eased the cuts in spending at Tātaki Auckland Unlimited from $44m to $34m. The $10m restored for the coming year “will enable retention of business incubator services, job creation and retention initiatives, maintained screen attraction and facilitation initiatives and continued attraction of major events and visitors”, his budget proposal said.
Whereas a little money goes a long way in such areas of economic development, that is not true of the council’s new Storm Response Fund. Brown is seeking only $20m for it in the coming financial year. Spread very thinly over four areas of work, it won’t achieve its goal “to increase resilience for the next and future events”.
Brown is equally unrealistic about the council’s 10-year planning, the next phase of which begins in September. He said the council’s aims included “long-term reduction in debt, sustainable funding for arts, cultural and social services, fairer funding for local boards, funding for the infrastructure most important to Aucklanders and focusing on opportunities to increase revenue in ways that make more money than they cost to do.
“This is my proposed direction for the long-term plan built off the back of this budget proposal.”
Those are some of the right goals, short and long term, for council. But Brown’s proposals to date won’t do the job. Worse, he shows no signs of the personal and political skills needed to work with councillors and citizens to develop and deliver far better plans.
Yet again in his press conference yesterday he was disparaging of councillors he considered opposed to him. And he was outright offensive to Viv Beck who ran against him in last year’s mayoral election. She’s chief executive of Heart of the City, a business organisation Brown needs to work with.
However, he hinted once again that he was only a one-term mayor, even though such short-termism only compromises his effectiveness.
At his budget press conference at Auckland Transport’s Viaduct Harbour offices, he said it was a “Waterfront Palace” that cost the council-controlled organisation $11m to refurbish and $6m a year to lease.
He said that he expected AT to leave within three years, “and move into council offices before I leave”.