Today's Herald reports Mayor Len Brown will be political toast after revelations the Council's credit rating may be lowered.
Len Brown's principal policy adviser James Bews-Hair says the Auckland Mayor will be "political toast" if the council's credit rating is lowered.
I hate to say “I told you so” - not.
The former Waiheke Local Board had to give our ‘feedback’ when the new Auckland Council was outlining its vision document, the Auckland Plan. I remember sitting in front of the Mayor and Councillors expressing our concern about the dangers of having an ‘unsustainable’ growth figure of 8% p.a. when the average for cities in OECD countries and Auckland over the last twenty years had been 2-3%.
When the economically illiterate Mike Lee (although the same could be said for 80% of the Councillors so he was in bad company) made the rejoinder “why not reach for the stars” I knew Auckland was doomed. He obviously didn’t know what happened to Icarus.
As the meeting ended I turned to our policy analyst, a man who understood economics, and asked what happens when the inevitably failure occurs. He shrugged and said, “I guess we’re all history”. Yes, just like Icarus I thought.
To base all the budgets on such absurdly optimistic targets was reckless and irresponsible. We are now seeing the consequences. Auckland Council has failed to reach its target year on year. I think the economy has to grow 15% this year to claw back the deficit.
Mayor Brown, who doubles as treasurer of the Super City, has borrowed $875 million on average in his first four budgets. This is nearly three times the average annual borrowings of $355 million by the former eight councils between 1989 and 2010. Debt repayment in the current financial year is $367 million.
Interest repayments and debt are ballooning carrying the mayor ever closer to the sun. I fear the wax is starting to melt. The structure is unsustainable.