0 Len Brown's budgetary dilemma

We blogged last week about the schism that has developed in the Auckland Council Chamber. Len Brown has suffered a couple of reversals in recent weeks.

This morning, the Herald has more to say on Mayor Brown's difficulties. Under the headline Hey big spender, you're in a deep financial hole the Herald's Super City reporter Bernard Orsman writes:

The chickens have come home to roost for the Len Brown-led Auckland Council after four years of big spending and debt-fuelled budgets.
In simple terms, the council has been living well beyond its means and got itself in deep financial trouble.
While it has made savings these have not been enough to prevent the crunch.
It's no different to a family mortgaged up to the hilt, with a new SUV on tick, trying to survive on the average 0.9 per cent wage increase.
This is Brown's fourth budget as City Treasurer and first 10-year budget based on the plans and visions of the Auckland Council.
He calls it a realignment of the numbers of the former councils. It's more political than that. It's about setting "affordable" and "sustainable" rates to match spending and delivering the $2.86 billion City Rail Link.

In our post last week, we blogged that there was little appetite amongst councillors for a rate rise of greater than what Len Brown had promised during last year's campaign; 2.5%. 

To fund all of Brown's grandiose plans, rates would have had to rise by almost double that, and a majority of councillors led by Deputy Mayor Penny Hulse voted Brown's Long Term Plan down. That's why they are back at the table now, going through the proposed budget line by line.

Orsman continues:

It remains to be seen how Brown will fully fund the rail link with the Government ruling out tolls and congestion charges, and how the community responds to reduced library hours and closing community facilities to pay for his number one project.
Yes, Aucklanders are strongly in favour of the rail link, but this budget will test the limits of that support.
To achieve his goals, Brown must strip up to $486 million of spending every year from the budget. These are huge, scary numbers that make last year's berm issues pale into insignificance.
Already, Brown is showing signs of wobbly behaviour by not guaranteeing to keep a key election promise to hold overall rates increases to no more than 2.5 per cent this term.
That was day one. There are 11 months until the budget is passed.

Len Brown has painted himself into a corner. He might have had some goodwill with council until his affair went public, along with the associated fallout. But what goodwill he may have had has long since evapourated.

Our informant was in touch again overnight. They suggested to us that there are now three blocs of councillors:

1. Len Brown and his loyalists
2. The "Right" bloc comprising Cameron Brewer, Dick Quax and Sharon Stewart
3. Deputy Mayor Penny Hulse and the remaining councillors

It seems that the latter two groups have formed a tactical alliance which may well cross traditional political boundaries. And between them, they number more than group #1.

Len Brown is a lame duck mayor, without the support in council to advance his agenda, and without the goodwill to be able to influence "floating" councillors to fall in behind him. On the other hand, Penny Hulse has played an outstanding game, and even though her politics differ to ours, she deserves praise. She is now the one providing the leadership which one could reasonably expect from the Mayor.

Interesting times beckon at City Hall; stay tuned!  

0 Is all not well at the Auckland Council table?

We received a lengthy e-mail yesterday from someone who has asked to remain anonymous. It concerns goings-on at the Auckland Council, and in particular, it suggests that the predictions that Len Brown was becoming a "lame-duck" mayor have now come to pass.

Our correspondent noted a number of issues that have arisen over the last week or so which are summarised here as follows:

• Long Term Plan 2015-2025 Draft which is set by the Mayor and approved by the Budget Committee was rejected by a majority of Councillors. It seems, but unconfirmed that the Deputy Mayor led the charge
• Council Chief Financial Officer resigned suddenly on Monday
• Louder rumblings that the 70:40 Brownfield:Greenfield Development Ratios set in the Auckland and Unitary Plans are now shot to pieces. Council seems to be moving towards a 50:50 split
• Auckland Transport is facing budget reductions. Dr Lester Levy of Auckland Transport was recently telling the Auckland Transport Board on "budget tectonics" in consequence of the Long Term Plan rejection by the Council. Check out the video here.
• The Council wants rates to be capped at no more than 2.5% and this is to be set in stone. This is well below the 4.9% the Mayor needs for his projects

Interestingly, there has been precious little in the media about this, which suggests Len Brown's  firefighting/PR team has been burning the midnight oil.

We will take every care to protect the identity of the person who has passed this information on to us. But it would seem Deputy Mayor Penny Hulse is seeking alternative consensus on budgetary and planning issues after setbacks for Mayor Brown with the Long Term Plan and now the Auckland Plan. In everything but name and salary, Penny Hulse seems now to be effectively leading the Auckland Council.

We will have more to blog on this issue in coming days. But it seems clear that Len Brown has lost control of his Council, and that does not bode well for the remaining two years of his term as Mayor. Nor does it bode well for Auckland.

0 Quote of the Day - 13 June 2014

Fran O'Sullivan's Herald column today is about political donations, and the expectations thereafter. Headed Cash donors have expectations it concludes thus:

Justice Wylie's judgment is also notable for the light it sheds on SkyCity's relationship with Brown. SkyCity had not previously donated to an Auckland mayoral campaign. But in 2010, Brown's campaign team approached the casino company for a donation.
SkyCity's board and CEO Nigel Morrison agreed to make the donation and one of a similar size to Banks. SkyCity did not want either of the two $15,000 donations to be made anonymously.
The Banks saga is still to finally play out. But what is notable is that Brown - who was publicly perceived to be concerned about the social cost of casinos - was quite prepared to have his campaign team pursue SkyCity for a donation.
As the EY inquiry disclosed, Brown benefited from free nights at the casino operator's hotel. Brown also gave his support to the Government's "pokies for convention centre" deal with SkyCity.
It's not easy to hold back a tsunami of disbelief that donor cash doesn't buy influence when looking at the sequence of events.
I've questioned before why Brown wanted to take power off the Council Controlled Organisations and centralise it in the mayor's office. There are some good commercial brains on the boards of the CCOs. But they have been subject to too much dictate from the centre.
At a national level, Labour's Andrew Little was right on the button with his call for an independent inquiry into the police decision not to prosecute Banks. But Little shouldn't stop there. The bigger question - which far outweighs Banks' transgressions - is why the police didn't file a legal prosecution against Labour Party identities after Labour raided parliamentary funds to back its 2005 campaign for re-election.
That question still remains.
Banks has paid a price for a crime which is substantially less than that committed by the country's then ruling party.

Fran O'Sullivan's comments about Len Brown and his relationship with SkyCity reawaken the events surrounding the outing of his affair with Bevan Chuang, and the investigation which followed. They will do nothing to dispel the lingering suspicion that Brown is unfit for the office of Mayor of Auckland on several levels.

But it is her comments on Labour and the 2005 Pledge card scandal that are the most telling. We warned Andrew Little last week to be careful what he wished for. Now the Pledge card rort is back in the news, and Labour will have to go into damage control all over again. 

This time though, they are doing the damage control from the Opposition benches, so any time spent putting out nine-year-old fires is time that Labour ISN'T telling New Zealand what it would do for the next nine years.

0 Hoist by his own petard

The decision in R v John Archibald Banks is now available online. In between tasks at work, we are slowly reading through it.

But we've just come across this paragraph:

You can't escape the irony here. In his desire to be transparent, and to comply with the "spirit of the law", John Banks chose not to hide his donations behind a secret trust. On the other hand, Len Brown hid almost $500,000 worth of donations behind the secret and previously unknown New Auckland Council Trust.

Len Brown wasn't worried about the "spirit of the law", and hid his donations in a manner that no one will ever know who his backers were. John Banks has clearly erred in not declaring the Dotcom donation, and will pay a high price. His desire for transparency was commendable, even though some of his decisions were poor ones.

Mr Banks is hoist by his own petard.