Aucklanders face rising costs, while council revenue jumps

On Thursday, Auckland Council posted its half-year results for the six months ending December 31, 2023.

The group’s total revenue was up 11.4 per cent on the same period in 2022, bringing revenue to $4.75 billion with a $1.36b surplus after tax.

Following the announcement on NZX, acting chief financial officer Nicola Mills told councillors at Auckland’s town hall that “it was a good week for finances” for the group.

Chief executive Phil Wilson said the council’s revenue bump was largely from rates rises, an increase in the number of ratepayers in Auckland, a targeted waste management rate and an extra $102 million coming from developers.

The council’s interim report showed rates revenue went from $2.3b in the second half of 2022 to $2.5b at the end of last year.

Wilson said in the report a major milestone was purchase of two hectares of land in Manurewa to extend the Auckland Botanic Gardens “as a treasured asset that offers educational, ecological and cultural experiences for visitors and future generations”.

The purchase took place last October after the sale of Auckland Airport shares, South Auckland early childcare centres and massive staff cuts at the council.

“We use debt to spread the cost of assets over the generations who will benefit,” Wilson said.

During the last six months council's net debt decreased by $429 million to $11.9 billion, which Wilson says is mainly as a result of the Auckland International Airport Limited shareholding sale.

Cost of living pressures remain

However, Ōtara-Papatoetoe local board chair Apulu Reece Autagavaia said that while rates rises are an essential revenue stream for local boards and the council, South Auckland homeowners are struggling to keep up.

He said Mayor Wayne Brown’s proposed long-term plan (LTP) is the perfect time to re-evaluate revenue streams.

Brown’s LTP proposes a further lift for Auckland ratepayers at a mid-level of a 7.5 per cent increase, which could squeeze already strained households even further.

Although homeownership is at its lowest levels in Māngere, Ōtāhuhu, Ōtara and Papatoetoe, Autagavaia said increasing costs for landlords are often passed on to tenants.

He said many South Auckland homeowners are also entering retirement, which makes it even more difficult to fund rates rises.

Tenants Protection Association’s Angela Maynard said Auckland renters are reporting rent rises of $100-$150 a week.

“Any increase in interest rates will eventually impact on tenants as there are no rent controls over how much an increase can be,” Maynard said.

And the pain for South Aucklanders and those in Pacific communities is not easing up as last week, Te Pūtea Matua, the Reserve Bank of New Zealand (RBNZ), held the official cash rate (OCR) at 5.5 per cent, holding back interest rate rises for the next three months.

Economist Filipo Katavake-McGrath says keeping the OCR at its current rate could lead to higher unemployment, which will adversely affect Pacific communities.

"We still see people who in the lowest income groups, who are often Pacific people, they are going to be the ones who are easiest to be made redundant.

"So we are the community who are most at risk when it comes to re-balancing through unemployment."

Watch an interview with economist Filipo Katavake-McGrath break down what the OCR means for Pacific families below:

It was also reported on PMN News, that rising rent costs have led some Māngere families to cut back on essentials like food to cover school uniform and supply costs.

I AM Māngere chief executive Toni Helleur said parents are struggling just to meet daily basic needs, which is a human right.

"Food is the first thing you cut off your budget to allow the purchase of your school uniforms for the year, which is about $350 per child."