Last week (17 May) Auckland Council approved its ten year budget (Long Term Plan), outlining priorities and spending for our city and region for the next decade.  Julie Fairey, Councillor for Albert-Eden-Puketāpapa ward, the City Vision voice at the table, worked with colleagues from around the region to secure some important wins.

Wins we are pleased to see secured in the budget:

• Port of Auckland Tāmaki Herenga Waka stays with Council, and will deliver significantly increased income to council, offsetting rates and funding community services
• Fairer funding for local boards – Julie has led this work within Council, which will mean funding increases for Albert-Eden and Puketāpapa, and that Waitematā Local Board will be no worse off
• Establishment of intergenerational investment fund that will deliver more sustainable council funding, worth equivalent of 1.5 – 2% rates rise income each year
• Reversed proposed cuts to bus services
• More sustainable rates increases, helping Council address years of underinvestment
• End to long term differential strategy which used to mean residential rates increased to cover decreases in business rates
• Increased funding for targeted rates that support water quality and natural environment work (in particular predator free work)
• Continuing the Climate Action Targeted Rate for vital mitigation and adaptation
• Committing to working with central government to get a visitor levy which will be especially helpful for Waiheke

Heading into consultation on the LTP City Vision’s submission guide recommended council retain the airport shares and not proceed with the Future Fund. However, City Vision recognises that securing important wins in the LTP required compromises to achieve the best overall result for Aucklanders from the budget:

• Agreement to transfer remaining 11% holding of the airport shares into the Auckland Future Fund
• Establishing a Legacy Fund for former Auckland City and Manukau City areas that will give capital funding for “fix and finish” projects in these areas in recognition they held the airport shares coming into amalgamation

The final budget proposal was approved 20 votes to 1 (dissenting votes on specific items are recorded in the minutes)

Here is Julie’s speech on why she decided to vote in support of the Future Fund and the sale of the airport shares.

I’ve really grappled with the way forward on the key issue here, the transfer, swap and highly likely sale of the airport shares.

Earlier in the year I was very sceptical about the Future Fund proposal, which seemed to me to be a justification for leasing the port.  I worried it would not be invested ethically, and would be easily undone by a future Governing Body.  I asked a lot of questions about these aspects, and the difference in returns for the Future Fund versus existing dividends or putting the dividends into the fund rather than the airport shares or port lease proceeds directly.

I could not have supported the Future Fund if it continued to require the port lease, which I think was and would still be a bad idea for workers, the environment and the city.  I’m glad that is off the table, and acknowledge the leadership shown on this, not least by many of my colleagues around this table, MUNZ and the Port CEO Roger Gray.

In the last month I have had all my outstanding Future Fund questions and concerns addressed, which was a surprise.  I thank staff for their expertise and time.

Another surprise for me in the last month has been discovering that the AFF will deliver the equivalent of about a 2% rates increase, every year, above what we would get from the airport dividends alone.

It’s no secret at this table that I think rates have been artificially low in a way that has resulted in underinvestment and put us in an opex hole.

It’s also no secret that there isn’t a majority at this table for the kinds of rates increases we need to close the gaps in renewals, climate action and much more.

The Future Fund helps me to move toward one of my goals in coming here; to get Council’s income on a more sustainable footing, and that is something I want to support.

Which leads me to how we create any Future Fund, and the proposal to do so through the transfer of the airport shares to the fund.  Quite simply we can’t have a Future Fund with no Fund.

In months of discussion about this no other non-service income-earning assets have been put up for the fund, other than the port lease, and I’m not convinced a delay as the amendment proposes, will change that.  We had a lot of these discussions last year too, and came up with no other options.

In addressing this I’m very mindful that I was elected on a City Vision policy platform which has included a specific provision on ownership of the airport shares for many years.

That policy platform has 14 headings, with each having many bullet points underneath.  When that policy was most recently refreshed in 2022 the policy all worked together, but in the situation I face today, the decisions before us and the broader financial circumstances of Council, in order to achieve progress on other policies, I need to re-consider the bullet point that covers both the ownership of the Port, which is now secure, and the airport shares.  I have talked this through extensively with others in City Vision, and they understand my dilemma and are supporting me in my approach today.

I was also elected by local people, who in their feedback for my area were in favour of the Future Fund and putting the airport shares, at a point where there were still a lot of the unanswered questions I had above.  Both of my home local boards voted unanimously for this way forward, across a political split of City Vision and C&R, who often don’t agree on these kinds of matters.  The regional feedback, thinking of being a regional councillor, was also a majority in favour.

Other factors I have considered are:

• Council’s approach to being a shareholder over the course of Auckland Council – a silent rather than noisy shareholder, who doesn’t participate in capital raising or have influence.  There has been no proposal by those who would keep the shares to change this approach.  I see little benefit in continuing to hold a financial interest in an asset that actually take no practical interest in.  The decision today for me does not privatise the airport; it is already privatised and has been for some time, not least through our own policy of not exerting any shareholder influence.
• The long shadow of the privatisations of the 1980s and 1990s, and the scars that those have left for many, particularly my fellow political travellers, and the symbolism of these airport shares being held by Council, not least to E Tu, the union I’ve been a member of for many years.
• The climate impacts of an airport are significant, in particular in regard to Auckland’s the income from car parking.  As regulations tighten around emissions we could end up in the difficult position of advocating or regulating for emission reductions in a way that reduces our income from airport dividends.
• The strong wish to hold the airport shares from my colleagues in the former Manukau City.  I attended the Pasifika Fono in Otara as part of the LTP consultation and heard first hand what the Council’s stake in the airport means to that community.  I’m mindful that particularly for Pacific Islanders the airport represents a crucial link to family and the whenua they come from.
• The intergenerational nature of the airport share holding, and the importance of maintaining intergenerational investments and stewarding them well to pass on to the future.

When the circumstances change sometimes we have to change too.

Taking all this, and more, into account, I intend to support the establishment of the Auckland Future Fund, and the transfer of the airport share holding to create an intergenerational fund that will be ethically invested, and deliver returns that allow us to increase investment in community services, climate action, empower local boards, and enable more good stuff for Aucklanders, without putting up rates further.

Further reading 

Five reasons Aucklanders should care about the council’s debate on its 10-year plan (Stuff)

Māori members controversially sidelined in airport share votes (Newsroom)

Wayne Brown a man with a plan (Newsroom)

Auckland’s Long-term Plan strikes a balance on 10-year investment   (Auckland Council’s Our Auckland)