Council freezes wages
STAFF at the Auckland City Council will miss out on pay rises this year in order to keep rates increases down.
The pay freeze and other cost saving measures will help trim rate rises to 2 percent, a change prompted by the economic crisis.
Mayor John Banks says the council will continue to aggressively cut costs, but the penny-pinching won’t slow investment in major capital projects.
“Despite the reduced rates increase, we will maintain the largest ever capital investment in the city next year,” he says.
Councillors were alerted to the change in a memo from chief executive David Rankin on Wednesday last week, one day before the policy was released publicly.
In the memo, Mr Rankin said political leaders had asked the senior management team to look at the budgets again, in light of the economic downturn.
The savings come from a number of factors including lower projected costs in labour, raw materials, depreciation and interest rates.
Mr Banks, deputy mayor David Hay and committee chairmen had been involved in the process, Mr Rankin said.
No budget will be allocated for staff pay rises and any “limited” increases will come from savings.
“This is a significant move that was not taken lightly,” he said.
“It shows that we are taking a lead in these difficult times to help the economy adjust and maximise the city’s and the country’s ability to navigate the economic downturn.”
Opposition councillors are angry they weren’t given any say in the decision.
Labour-City Vision caucus leader Richard Northey says the cost-cutting is likely to see more services slashed.
“These further cuts to council services and projects, coming on top of the savage cuts already announced, will be devastating for Auckland’s suburban communities.”
The wage freeze will add to uncertainty for staff already anxious about the outcome of the Royal Commission on Auckland Governance, Mr Northey says.
Last year the council announced major cuts to budgets in order to keep rates increases within council’s rate of inflation, then 5.1 percent.
Councillors meet on March 4 to discuss the proposed further cuts.
The draft 10 year plan is released for public consultation in April, before being adopted in June.