A fund to protect Auckland’s financial resilience now has the legal protections in place to protect it for future generations.

The Auckland Council (Auckland Future Fund) Local Bill, protecting Auckland’s long-term wealth fund, has passed its third reading in parliament.

The Auckland Future Fund is a long-term wealth investment for Aucklanders, and this government bill adds the strongest protection possible, to ensure that distributions from the capital base are only ever used for what the fund was intended for, improving Auckland's financial resilience.

Auckland Mayor Wayne Brown says it’s another action that shows the government is listening.

“I commend National’s MP for Mt Roskill, Dr Carlos Cheung for getting it through. He’s done a good job. The legislation requires, among other things, a super-majority around the council table to withdraw capital, ensuring it’s not a piggy bank to just dip into at random. This is a sensible idea, and an example of Wellington doing what Aucklanders want.

Mayor Brown says the fund is about building resilience into Auckland Council’s financial future.

“We must strengthen Auckland’s financial resilience, and this is one of those pieces. The fund is already contributing way more than the airport shares it came from, and that will benefit Aucklanders into the future.”

Chair of the council's Value for Money Committee and Deputy Mayor, Desley Simpson, also welcomed the passing of the Auckland Future Fund legislation.

“One of the mayor’s key initiatives we delivered on last term was to set up an Auckland Future Fund to deliver a higher return from our investments. With the Government passing the AFF third reading yesterday we are another step closer to delivering a stronger long term investment income source for years to come, with long-term legislative protection.”

"Council remains committed to look for new revenue tools to reduce the burden of rates. Currently council’s income from rates is only 35% and the Future Fund is a key tool in keeping that rates percentage as low as possible.

Notes:

The fund is valued at just over $1.3 billion and returned a dividend of $38.4 million this financial year, this means the council is more than $100 million better off than if it had kept its airport shares.

The fund provides for:

• A better return on investment
• Increased non-rates revenue
• Reduced risk by diversifying markets and geographic locations
• Protection of intergenerational assets and their value

This Bill adds the next level of protection for the Auckland Future Fund, and was unanimously endorsed by Auckland Council, and the Fund has been fully scrutinised by the Auditor-General through firstly the Long-Term Plan process, and latterly as a CCO.

This Bill is very simple, but significant. It sets out that:

• The council must maintain or increase the fund’s real value over time
• It must be used for the benefit of current and future generations of Aucklanders,
• That any future council wanting to reduce the value of the fund must agree by a 75% majority to do so.

All of the information about the Fund is available on the website www.aucklandfuturefund.co.nz should members wish to read the letters of expectation, the statement of intent, the responsible investment policy, the distribution policy, the fund policy, the deed of trust and board minutes.

The Bill does not set up the fund. The fund already exists. Rather, it adds the additional layer of protection that Auckland’s councillors asked for, and can only be done by legislation (that’s why it’s coming as a bill).

The Auditor-General, for which Parliament is responsible, audits the council and its CCOs annually. This includes the Auckland Future Fund.

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