This memorandum is not part of the determination, but is intended to indicate its general effect.
This determination comes into force on 1 July 2016 and expires on the close of 30 June 2017. 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, the most recent in 2015.
In setting the remuneration for 2016, 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 over 8 000. 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.
The Authority considers it is not possible to address these levels of increases in the current environment, although we remain of the view that a serious conversation about the size and nature of the positions needs to be held after the coming election.
We have determined to increase remuneration by 1.5% for all positions. This movement represents the lower end of increases we have applied to other positions we set and is the same movement applied to other major centres.
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 and we will be undertaking this during the next year.
The determination includes minor changes to the rules applying to members claiming mileage and travel payments.