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Living Wage at Auckland Council could cost ratepayers $17.2m

Media release

Auckland Councillor Cameron Brewer

Thursday, 23 May 2013

Living Wage at Auckland Council could cost ratepayers $17.2m annually

Following on the heels of Hamilton City Council, the adoption of a living wage policy at Auckland Council could be imminent and with the multi-million dollar cost set to be lumped straight onto suburban ratepayers, warns Auckland Councillor for Orakei Cameron Brewer.

Mr Brewer cited a report and minutes from the Council’s Auckland Plan Committee on 12 March, where a majority of councillors voted to ‘direct officers to undertake further work on the implications of introducing a living wage for Auckland Council and any implications for the wider Auckland economy…’

“This was despite a report very clearly stating that lifting the hourly rate for 1,544 council staff to $18.40 would cost ratepayers over $2.5 million, excluding Auckland Transport and Watercare. Likewise, if the so-called ‘Auckland Living Wage’ of $24.11 was introduced affecting 3,354 staff it would cost ratepayers over $17.2m per annum.

“The report also concluded that ‘initial analysis by Finance indicates that the increase in rates needed could be 0.2% and 1.2% respectively’. The increase on the council’s salary budget would be 0.6% and 4% respectively. And that’s excluding all the staff in the two massive CCOs Auckland Transport and Watercare, so the end cost would be much higher still. 

"Given just how stretched ratepayers are at the moment, it’s crazy that majority of councillors even voted for council staff to spend even more time and ratepayers' money investigating this."

"We have over 1,165 council staff earning over $100,000 with 123 of them earning over $200,000, an annual wage bill exceeding $670m, and now many councillors also want a living wage imposed on ratepayers! It's all very well for some businesses to pay a living wage, because their customers have choices, but in local government, ratepayers have no choice but to pay any extra costs passed onto them."

Back in March Mr Brewer moved an amendment to the motion, seconded by Christine Fletcher: ‘That any further work on the living wage be done on the proviso that any extra money required be found within the current $670m wage and salary staff budget of Auckland Council, not funded by a further rates increase.’

However Mr Brewer's amendment to let ratepayers off the hook was lost five votes to 10.

“A majority of councillors seem determined that the extra cost should fall straight onto suburban ratepayers. Let's not forget that most of our elderly ratepayers are battling on fixed incomes well below the minimum wage of $13.75 an hour. Yet struggling ratepayers could soon be forced to give up more of their income to fund a living wage policy for council staff.”

“The authors of the report presented to councillors in March noted the Government’s concern about the potential loss of jobs if the policy was adopted nationally and that ‘an increase in rates may also have an inflationary effect and create an economic deadweight loss to society’. Councillors need to take heed of these concerns, and ratepayers’ back-pockets, when this issue comes back to us,” says Mr Brewer.

SEE:
Auckland Plan Committee 12 March 2013
Item 12
Agenda link to the website:
http://www.aucklandcouncil.govt.nz/EN/AboutCouncil/meetings_agendas/committees/Pages/aucklandfuturevisioncommittee.aspx


Ends

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