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National
Tim Murphy

Brown's budget ends in purgatory

Wayne Brown, centre, wanted to sell all 18 percent of the council's airport shares to raise $2.2 billion to pay off debt. Photo: Getty Images

Wayne Brown conceded ground on almost all his original planks for Auckland Council's budget, and ground out a kind of political draw that left no one particularly happy

"I'm so full of dead rats," Wayne Brown half-joked, half-sighed at the end of two days of high stakes Auckland Council budget haggling.

The first-term mayor had indeed had to ingest changes to his proposed budget that were clearly unpalatable – only allowed to sell 40 percent of the council's airport shares to pay off debt, separately having to borrow $30m more than he'd hoped to cover a budget hole and having to push up households' rates by an average 7.7 percent, higher than his hard target of the rate of inflation.

But his disappointment mirrored the disappointment of a bloc of councillors who fought hard and innovatively to stave off any airport share sale.

Everyone looked deflated. Some were angered.

Within days of his October election, Brown had had to start crafting a budget for the financial year starting on July 1. It was a hellish ask, to a new administration in an economic crisis and accentuated by the summer storm damage and City Rail Link cost blowout. 

He started out going hard, going early.

And to criticisms of his measures, he often reminded the council over the six months of budget consultation and negotiation that "everyone wants to go to heaven but no one wants to die".

On Friday, he and his 20 councillors ended up in a kind of purgatory – a holding position, neither punished nor rewarded, as they wait to start work on the next big hurdle, their 10-year budget plan. 

The Long Term Plan achieved a form of nirvana status for both sides in the council budget debate.

Those opposed to the airport asset sale wanted it put off until the long-term financial strategy had been negotiated. Brown and co clearly want to use that long-term process to restructure and reform the council, set new lower debt limits and constrain future spending and rating policies.

For the Mayor, this year's budget resolution wasn't all about what he gave away to get there.

He did force through a version of the share sale – which just days ago was a kind of holy grail, with no alternative to be tolerated. And he will be able to pay down the council's $12 billion debt by around $865 million.

He did limit the amount of new borrowings some councillors favoured to cover the immediate $325m budget hole.

And he held to the principle that the council, its business arms and its local boards had to make cuts, had to begin to live within their means, as a whole council family.

Politically, Brown managed the council meeting deftly, to the surprise of some, including former Auckland City mayor Christine Fletcher who volunteered faint praise as the final vote was about to be taken.

He chaired proceedings with a degree of patience not on display often in his first six months in office; he bit his lip, held (most of) his personal quips, accommodated almost every request for time and space to debate. And he looked to be counting to 10, counselling himself to be patient in the face of procedural delay and a loud protest from the public area at meeting's end.

If the airport share sale, and the imminent paying down of debt, was his immovable position, (his There is No Alternative answer), even on that he and his advisers were prepared for measured and staged retreats. 

On Thursday morning Brown wanted to sell all the council's airport shares (18 percent of the company) and raise $2.2 billion to pay off debt.

By lunchtime, after teasing out the councillors' preliminary views on the share sale, he was back with a curiously nuanced and revised position for such a short time to reconsider (to sell 8 percent and raise $1 billion).

By Friday he and his team headed off what seemed like a 6 percent sale proposal from Councillor Chris Darby by agreeing to lower the Brown package to 7 percent and raising $865 million.

And with that, and adjusting new borrowing a little higher and insisting on some reinstated cuts to the council organisation and local boards, he had a deal.

It passed by 14 votes to six, with one glaring abstention: from councillor Julie Fairey, who had been in an uncomfortable position early in the week as wife of Transport Minister Michael Woods, who it was revealed had failed to declare his shareholding in ... Auckland International Airport Ltd. 

Fairey wasn't happy with a partial sale of shares, and when she made that clear to claps from the public gallery, she scolded the applauders: "You don't need to clap, because I'm not very happy about it."

Deputy Mayor Desley Simpson wasn't particularly happy either. "It's a budget that's a compromise for pretty much everybody around the table." She'd have preferred the full share sale, to pay down more debt, and lower rates increases.

Councillor Mike Lee wasn't at all happy, predicting the part-sale of airport shares would be step one towards a full selldown. "This is a death dive, in fact."

Darby maintained the dead rat metaphor: "We have all got rodent flesh in our teeth at the moment."

Councillor Kerrin Leoni felt the whole exercise had been traumatic for the community and staff and ratepayers. "The city has been dragged through turmoil and stress for months."

Richard Hills didn't want to present the agreed budget, less still vote for it. But he did. "Eleven of us have to find a position that saves as many jobs as possible, as many services as possible."

Brown, part despondent, part worn out, possibly part looking forward to his next game of tennis, wearily drew the meeting to a close.

"We've actually passed a budget. It's more with relief than with joy."

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