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The Auckland Council’s projected budget explosion could more than double to $ 1 billion, a new forecast suggests.
Phil Goff, Mayor of Auckland
Photo: RNZ / Dan Cook
Councilors have been told that the $ 450 million hole caused by Covid 19 could grow another $ 540 million if the border remains closed for two years.
In a statement, the mayor’s office said the latest projections were that Covid-19 and other impacts on council revenue would persist longer than anticipated.
Indicative magnitude of reductions in council cash operating income relative to pre-Covid-19 budget projections:
| Financial year | Impact on cash income |
|---|---|
| 2021/2022 | $ 260 million |
| 2022/2023 | $ 170 million |
| 2023/2024 | $ 110 million |
Auckland Mayor Phil Goff said that about 60 percent of the council’s revenue comes from sources other than fares, such as Auckland airport stock dividends, concerts, visitor attractions and operations at Auckland ports.
All of these sources, he said, had been hit hard by the border closures and lockdowns.
“If we assume the borders could be closed for another two years, the most recent forecast shows that we could lose an additional $ 500 million in the next three financial years, on top of the $ 450 million revenue achieved in the 2020/2021 financial year. “. Goff said.
“Many companies in Aucklanders and Auckland are making it difficult with low revenues. The City Council is in the same situation of having to do what we have to do with less money than we had planned.
“Councilors made some really tough decisions in this year’s Emergency Budget due to reduced city revenues. There was no money to waste, but we made sure to continue to invest heavily in major infrastructure projects and to maintain basic services. working.
Finance and Performance Committee Chairman Counsel Desley Simpson said the Covid-induced financial emergency would last longer than the financial year.
“We must keep our focus on savings and efficiency as we make tough decisions about what we can deliver, given this billion dollar economic hit.
“In the 10-year budget, our challenge will be to maintain our investment in critical infrastructure and services while keeping debt at a sustainable level and developing a practical long-term plan for the future.”
