Further proof council doesn’t have a revenue problem – it has a spending problem.
The following is a transcript of my comments during the debate at the 3 February meeting of the Governing Body, regarding council’s response to the government’s rate capping legislation. Link: https://youtu.be/3ZGWIDLChxg?t=8135 (approximately 2:15 to 2:22)
I think we have to be very careful about getting into a parallel universe situation here, where we, Auckland Council, the ‘Super City’, become very defensive when the government - even by implication - questions our financial management. I think that would be unwise. The wording of this submission is unwise in my view, in the way it is dismissive of the government’s attempt to respond to growing public concerns about out-of-control council rates – not just in Auckland but across New Zealand,
We could be well be out of step and out of touch with the public. The government is facing an election and so it is obviously very aware and understandably sensitive about how people feel about council rates. And well they might be. People are fed up with the ever increasing cost of rates and the diminishing return the people of Auckland in particular, are getting from those rates. This very much suggests we have a systemic problem in this council which we appear to be in denial about.
This council over the last ten years has taken about $15 billion dollars in rates. We intend to take another $3.2 billion in the coming year. People are being squeezed. Of course there are all sorts of other charges as well, Watercare charges for one, which like rates always go up. This is the real cost of living challenge that our people are facing, including the cost of groceries and of power. Mortgage interest rates can be a real concern when they go up but interest rates also go down. But council rates never go down. They always go up and up. And what the public get back seems to be less and less.
Throughout the council’s submission document there are many references to the strategic challenges we are facing, infrastructure, transport, rail and so on. These are big ticket items, no doubt about that. But our financial management record here is troubling. A councillor has talked about the costs the government directly or indirectly imposes on us. That’s a fair point, but we never push back.
A good example is KiwiRail’s rail network access charges. This situation does not reflect on Kiwi Rail as much as on us and our commercial competence. Since 2021, we have had 595 days of network shutdowns, 180 full days with no train services at all. And at the same time, at the beginning of those five years, this council was paying KiwiRail $25 million a year in network access charges, essentially rent to the landlord. Now we are paying $92 million a year to this landlord and we have agreed to increase that by another $5m.
And if you take that analogy further, it’s like the house we are renting has rooms that are not serviceable, but we still happily, without question, without pushback, without challenge, continuing to pay rent increases. In fact, people in here have stood up and tried to justify this. [Not to forget that over the same period, as a consequence our rail patronage has collapsed from 21 million trips in early 2020 to 13.06 million trips in 2025. But it’s the long suffering ratepayers who bear the costs for this incompetence.]
I think we need to own that we have a fundamental problem here, rather than the mayor talking about the cost of baked beans and other nonsense. In this submission we should be saying, yes, we recognise there is a problem with respect to our costs, and we are serious about working with you on solving it. But no, we will not say that. We are in denial.
The fact is, given the enormous amount of money we have been collecting from householders and the enormous amount of money we have been spending, Auckland Council doesn’t have a revenue problem - it has a spending problem. And the people of Auckland, I understand about 75% in public opinion polls, have had enough. It would be wise for us to listen a little more carefully, rather than getting into denial and living in a parallel universe – a state of affairs that cannot last for much longer.
Pictured: Mike Lee - ’The people of Auckland have had enough'
