This memorandum is not part of the determination, but is intended to indicate its general effect.
This determination is deemed to have come into force on 1 July 2015 and expires on the close of 30 June 2016. The determination sets the remuneration for the members of the Auckland Council and its local boards for that period.
The Remuneration Authority has had the responsibility for establishing remuneration for the Auckland Council since before that council was established.
We have undertaken 2 job-sizing reviews since 2010, and will be undertaking a further review before the 2016 elections.
In setting the remuneration for 2015, we confront issues that become sharper each year.
Auckland City is the home of almost a third of the New Zealand population. The Auckland Council has an annual budget of over $3 billion and a staff of 8 800. It is a city where there are extremes of wealth and poverty, and where raising the funds to maintain and enhance infrastructure and community services is placing pressure on all ratepayers and is causing significant community concern.
The governance of the city is unique in New Zealand and there can be little doubt that the pressure on the 20-plus members of the governing body and around 100 local board members, particularly during the development phase of the city’s long-term strategy, has been immense.
Since the establishment of the Auckland Council, we have taken an extremely conservative approach to setting remuneration, to some extent with the expectation that workloads might reduce as the consolidation of the city occurred.
The initial remuneration established for the Auckland Council represented a saving of $1.2 million on previous expenditure. While we are unable to accurately assess the situation as if amalgamation had not occurred, it is still our view that the remuneration costs of governance are significantly lower than they would have been without the restructure.
We are, however, confronted by 2 stark choices.
To provide remuneration for a councillor at 80% of the public sector remuneration for a position with the appropriate skills would require an increase of at least 20%. For positions with additional responsibilities (such as the Deputy Mayor and committee chairs), the increase would be significantly higher.
Remuneration for local boards is currently closer to a figure we deem fair to the incumbents, but it is still significantly behind other public sector remuneration, and especially so for local board chairpersons.
We clearly cannot, and will not, implement such increases because it would not be fair to ratepayers.
We have determined to increase remuneration for the governing body by an average of 2.3% (rounded) and have applied increases of between 3.4% and 6% to local boards. The 2.3% figure mirrors annual movements in mid-level public sector positions and, combined with the increases for local boards, keeps the increase in governance costs close to the general rate increase.
Some may consider that the Auckland Council’s remuneration is too high and that increases in remuneration for senior people in business and in the economy are not warranted. On the other hand, the Auckland Council is required to lead one of the most significant contributors to the national economy, and the remuneration of its members is significantly discounted against public sector remuneration.
We believe that to pay members of the Auckland Council less than the amounts in this determination would be patently unfair to the incumbents. We believe that the remuneration we have set is fair in the current economic circumstances, but we also believe that a more substantial debate on the expectations put on local government members is warranted.
There are no other changes to conditions or allowances included in our determination.