Project
December 14, 2016
AUCKLAND
Goffâs plans for Auckland Despite only being a few weeks into the job, new mayor Phil Goff has a firm grasp on his councilâs priorities, report James Penn and Tim McCready
A
uckland Mayor Phil Goff acknowledges that virtually everyone agrees upon the cityâs challenges. âOur population went up by 42,600 last year. Our infrastructure in both transport and housing is creaking at the seams,â explains Goff. âIt has not coped, it has been historically underfunded, and the failure of infrastructure to keep up with growth has given us growing traffic congestion leading to gridlock, and a growing housing shortage leading to gross housing unaffordability.â On one level, the solution appears simple: increase infrastructure spending. The Unitary Plan will ease previous building consent issues, making it theoretically possible for many more houses (or perhaps more accurately, apartments) to be built. But alongside consent as a precondition for construction sits infrastructure â roads, public transport, utilities â to support them. âNow, I think that analysis is accepted by almost everybody,â says Goff, moving the discussion along to where things are more challenging: âHow is local government going to do that? âIt canât do it through rates, which is the narrow revenue base that statute gives to us. I made a clear promise â cap it at 2.5 per cent â I intend to keep that promise.â The next obvious pathway to infrastructure spending might be further borrowing. âCross that one off the list too,â says Goff. âStandard & Poorâs gives us a very high AA credit rating, and also gives us a constraint that says the debt-torevenue ratio should not be more than 265 per cent. In next yearâs budget, it will be 256 per cent,â he points out, with impressive adroitness for a man only five weeks into the job. âI have very little freeboard, and Iâm not about to give away prudential reputation or my credit rating â that will cost tens of millions, potentially hundreds of millions, of dollars â so I canât borrow to do that.â Selling the councilâs assets â such as its 22.4 per cent holding in Auckland Airport â is also off the cards. Being a one-off solution, Goff says it doesnât sufficiently address the revenue side of the equation on an ongoing basis to warrant consideration. Beyond the airport, the councilâs asset ledger is rather limited. Such is the extent of the need for cash, though, that Goff wonât entirely rule out selling the councilâs own office building in the city. âIf I had to sell this building and lease it as the price of an arrangement with government â itâs not a strategic asset. ââAll in all Iâd probably rather keep
Phil Goff, Auckland's new mayor, has biffed the chauffeur driven mayoral limousine in favour of a self-drive hybrid car and an electric bicycle.
the building than sell it, but Iâm flexible on that.â Private sector and efficiencies The mayor stresses that the infrastructure investment effort is not purely a public-sector consideration; he wants business involved as well. âI think business can be Aucklandâs strongest allies in terms of investment spend. I think theyâre a critical part of the equation, and their support for the increase in investment in infrastructure will be critical in terms of governmentâs thinking.â Goff says he has been doing all he can to send that message to the business community, through discussions with key figures such as Auckland Chamber of Commerceâs Michael Barnett and the EMAâs Kim Campbell in particular. Council-controlled organisations (CCOs) such as Ateed have been the subject of criticism from the business community in recent times, with Barnett outspoken on the recentlyannounced new slogan. Goff is cognisant of the issues around CCOs and how they operate, pointing to Auckland Transportâs light-rail announcement earlier this year as an example. âThe sense that Iâve got from being on the campaign trail is that Aucklanders by and large thought that the term âcouncilcontrolled organisationâ was a misnomer; that weâd set up a group of boards that had taken over the function of council but were not particularly responsive to them.â How might that be addressed? The council restructure already implemented will see CCOs reporting more directly to council committees, part of an overall effort to make them
more responsive to their shareholder â âwhich is the council and people of Aucklandâ. âCCOs will report not only to Finance and Performance, but also to the committees that deal with their particular field. So for example Auckland Transport would be reporting not only to Finance and Performance, but also to Planning because it has jurisdiction over that area of transport.â One area where Goff wants to bring some of the flavour of central gov-
that weâve got the best performing council in the country. âWeâve been through six years where the council has worked out what it means to have one council in place of eight, but I donât think weâve done enough in terms of exploring the efficiencies that we mightâve expected.â He wants to see a reduction in staff numbers â âpreferably by attritionâ â and a reduction in resource use more broadly. CCOs are not immune from these
I think business can be Aucklandâs strongest allies in terms of investment spend. I think theyâre a critical part of the equation, and their support for the increase in investment in infrastructure will be critical in terms of governmentâs thinking.
Phil Goff, Mayor of Auckland
ernment with him is in utilising the existing accountability mechanisms available to councillors under the Auckland Council Act. âI want the councillors themselves to be more effective in the manner of a cabinet committee, or even a select committee, in being able to cross-examine and interrogate the council-controlled organisations around their performance.â The restructuring has also seen the overall number of council committees reduced from 19 to nine. Goff is searching for those sorts of efficiencies across the entire body. âWhat Iâm looking at is to ensure
efficiencies. Shared services are on the agenda, with functions such as human resources and procurement to be potentially merged and shared among multiple CCOs. And a more radical restructuring, while not on the agenda, is not ruled out either. âMy first priority is to see that they can work as effectively as possible within the current structure,â explains Goff. âBut over time if there seems to me to be a business case for amalgamating I wouldnât rule that out. But itâs not on the top of my list of priorities, and no definite decision has been made around that.â
Creative funding solutions Goffâs preferred solutions are a little more creative, and arguably unconventional for a former leader of the Labour Party. Getting Aucklandâs fair share of the Governmentâs Housing Infrastructure Fund is the first step. While Labour opposed the fund, Goff supported it while still an MP. The $1 billion fund will provide financial support for projects in the areas of roading, water, wastewater, or stormwater infrastructure. The projects must be intended to support the building of new dwellings and must be from councils in âhighgrowth urban areasâ. âI would hope to get a significant share of that fund,â says Goff. âDone right, that will enable me to do a whole lot more.â Itâs no surprise that securing Aucklandâs slice of the new fund is on the mayorâs agenda. But the idea of a petrol tax might raise a few more eyebrows. âI have been for quite some time a convert to a degree of userpays in a system,â explains Goff. âI always thought that was part of the National Partyâs philosophy, and I canât think of strong rational grounds for opposing it, other than â probably â no government wants to be associated with a new form of tax.â The political ambition of such a plan is not lost on Goff, but he senses potential co-operation from central government in the future. âI think there is room to negotiate there â itâs maybe about timing. âThe Government has already accepted that a congestion tax would make a lot of sense. A congestion tax continued on F2