Auckland Council locks in record 7.9% rates rise for 2026/2027 to fund City Rail Link

Brown pointed out during the debate today that “actually a lot of work” was done to get to the 7.9% rise, especially considering the added pressure of the fuel crisis.

“It’s easy to say ‘woe is me’. We’ve got this railway. If you don’t pay for it this year, you’re just going to pay for it next year,” he said.

“The CRL budget was out of control before I arrived. We’ve got this down to nought plus a railway. It’s easy to say how terrible things are ... as if we didn’t know.”

Rising fuel costs are estimated to have increased the council’s operating costs for 2026/2027 by at least $25m, although the figure might be $50m or more if fuel prices increase further.

The mayor took aim at Gillon’s amended 5.9% rates rise proposal, describing it as “more showmanship”.

“We should be responsive to change, not responsive to sloganeering.

“You might have said you ought to make the railway a hell of a lot cheaper, but you didn’t.”

Auckland councillors interrogated the detail of Gillon’s amendment to raise operational savings to $166m, inclduing options of “delaying the strategy of fully funding depreciation by one year” and “deferring the $7 million major events funding shortfall”.

In order to fund these savings, Gillon’s amendment requested Auckland Council chief executive Phil Wilson reported back on several options.

These included a freeze on filling non-essential staff vacancies for one year, non-essential travelling, advertising, subscriptions and ceremonies.

Other cost-saving options included capping external consultancy and professional services, ceasing the food scraps collection and lowering or removing the Green Star certification requirement on new builds, which aims to minimise energy and water consumption.

“I think 7.9% is too high when you consider the cost increases everywhere at the moment, and lots of households are really struggling,” Gillon told the Herald yesterday.

“It’s difficult just to make ends meet so now’s not a good time to be increasing rates by the biggest increase that the Super City has had.”

Councillor Richard Hills today pointed out Gillion’s suggestion that deferring the $7m major events funding shortfall would mean there would be no ASB Classic, Auckland Fashion Week, Auckland Writers Festival, Auckland Marathon and the New Zealand Warriors would not be playing on Anzac Day.

Hills said Christchurch would be “licking their lips” at the prospect of luring the All Blacks away from games in Auckland without that Major Events Fund.

Brown said he knew Gillion’s amendment was made with “good intentions” but “the road to Purgatory is paved with them”.

Brown pointed out that one of Gillion’s suggestions, that there be a freeze on hiring non-essential staff, was already in place.

The mayor also took issue with the fact Gillon’s amendment didn’t take aim at local board funding, which he described as “one of the most bloated parts of our organisation, who have never been under an intensive review”.

Brown said on Monday new inflation forecasts and global fuel pressures “added a massive $213m risk to our budget”.

“Without our $106m savings plan, that volatility could have forced a 15% rates hike on Aucklanders. Instead of taking the easy way out and passing that straight on to ratepayers, we are choosing strict discipline and internal savings.”

Deputy Mayor Desley Simpson said Gillion’s amendment, backed by councillor Bo Burns, should have been “given more slack” and in fairness she said they had done well, given they were “new to the town hall table”.

Simpson said she would like to see a lower hike than the proposed 7.9% but she didn’t think it could go as low as 5.9%.

“What this amendment does is it adds another $60 million ... which means we’re well staring down the barrel of well in excess a quarter of a billion dollars, a bit over $270 million[in budget risk] in one year. Now that’s the figure we’re trying to achieve in a whole term.

“We’re also at risk of going down on our credit rating. Any basis point added to our borrowing will be passed through to higher costs for us. Now we are already on a negative watch.

“I like some of your suggestions ... we’ve already started looking at them,” she said, adding that this has been directed on to staff in the search to make the original $106m operational savings part of the 7.9% rise.

Simpson said that, sadly, she couldn’t support the amendment “because the underlying factor is you’re adding $60 million to the already $213 million that we’re finding” and the “magnitude” of that budget risk was unacceptable.

Councillor Bo Burns, who seconded Gillon’s amendment claimed the 7.9% rates increase was only the average and that many Aucklanders will face an “effective” rates hike between 12-15%.

Following the publication of this article, Auckland Council disputed this claim from Burns. From July, the council’s early estimates are that the vast majority of unchanged residential properties (around 94%) will receive a rates increase within 1% of the 7.9% average. No unchanged residential properties will receive an increase above 10%, council said.

Councillor Shane Henderson also said he could not support the amendment because it would likely lead to a credit downgrade from delaying the strategy of fully funding depreciation by one year.

Earlier today during question time, Hills asked about the impact of a possible downgrade in Auckland Council’s credit rating, due to rating agencies’ concern about the Government’s rates cap, and other factors including the fuel crisis.

Hills asked if this would mean some of the proposed rates increase could just go to meet increased interest, via the ratings agencies, on the council’s billions of dollars of debt.

Auckland Council group chief financial officer, Ross Tucker, accepted this possibility, saying it “would aggressively increase” costs of $5-$10m “as we price debt”.

Yet eight councillors supported Gillon’s ammendment.

One of those was John Watson, who said it was misleading to define today’s 7.9% rates increase as “a one-off”, pointing out rates increase are a consistent trend in Auckland. Many of his constituents had faced a 10-20% rates increase in the last year, he said.

“That’s baked in now ... and we just give the tired all excuses ‘oh it could be worse’,” Watson said of the continual rates rises.

“You have to ask where does it all end?” he said. “There are a lot of people out there who are not going to be able to pay those rates.”

Councillor Mike Lee also supported the 5.9% ammendment and said the continual rates increases were always justified by an “external crisis” such as Covid, floods and now the fuel crisis.

“It’s never about us,” Lee said, referring to the council.

The Waitematā Ward councillor said the council should look at home for savings, saying there were three internal council finance departments.

Councillor Christine Fletcher said she was regularly accosted by people in the shopping centre saying they have no further money to give to the council.

“It is not business as usual,” Fletcher said, accusing the governing body of sitting in an “ivory tower”.

“All of us are feeling a little fearful about the future right now,” she said.

“I do think [the] council are tone deaf on this issue.”

Brown’s draft proposal of a 7.9% rates increase was announced on December 1, directly after Prime Minister Christopher Luxon confirmed the Government would introduce a rates cap of 2% to 4% from January 2027.

Auckland Council’s Long-Term Plan 2024-2034 (LTP) aimed to reset the council’s financial position after a period of higher inflation, costly storm events and the completion of the CRL.

The LTP had projected a rates increase for 2026/2027 of about 11% might be required to fund the $235m annual operating and ownership costs of the CRL.

However, the LTP set an additional savings target of $106m for 2026/2027 to achieve a planned rates increase of 7.9%.

General rates are based on the capital value of a property and fund a range of services available to all Aucklanders, including libraries, pools, parks, roads, footpaths, stormwater services and public transport.

For the average-value residential property in Auckland, the 7.9% rates increase will equate to $320 a year, or $6.16 a week.

Voting in favour of the 7.9% rates rise were Brown, Simpson and the following councillors: Andy Baker, Josephine Bartley, Julie Fairey, Alf Filipaina, Lotu Fuli, Shane Henderson, Hills, Daniel Newman, Sarah Paterson-Hamlin and Greg Sayers.

Councillors who opposed it: Bo Burns, Christine Fletcher, John Gillon, Mike Lee, Ken Turner, John Watson and Maurice Williamson.

Sayers however abstained from voting for the 7.9% rate rise at the prior budget meeting, telling the Herald he didn’t support it despite his “rubber stamping” of the final governing body vote.

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