Twyford Phil: Budget Debate 
Twyford Phil: Budget Debate 
[Volume:664;Page:11704] 
PHIL TWYFORD (Labour) 
: 
 It is a privilege to be bringing up the rear of this estimates debate 2010. I think it is pretty well established in the mind of New Zealanders now that this Budget was a pay-off to National’s political base masquerading as an economic development plan. The centrepiece of the Budget’s programme of tax cuts is clearly a tax swindle. This Government has been saying to New Zealanders for the last few weeks that this is about giving New Zealanders back their own money. In fact what we are seeing is a significant redistribution of wealth away from middle and low-income earners in this country to the well-off. 
A number of things are worth mentioning. An average family with two young children even after giving them the benefit of a wage increase ends up $55 per week worse off after the GST increase with the 6 percent inflation that Treasury forecasts and the cuts to early childhood education. A third of the tax cuts go to the top 5 percent and 15 percent go to the top 1 percent. I ask members on that side of the House how that can be considered fair. 
I will talk about one particular line in this Budget and that is the $22 million loan to the people of Auckland. This is the third of three loans that have been made to fund the work of the Auckland Transition Agency in setting up the Government’s super-city in Auckland. In total the Auckland Transition Agency has been loaned $94 million by this Government. 
Hon David Parker 
: How much? 
PHIL TWYFORD 
: It is $94 million which will be paid back by Aucklanders over the next year. The tax swindle is not the only swindle in this Budget. What this Government is doing in Auckland in the way that it is spending Aucklanders’ money like a drunken sailor on shore leave is also a swindle. The Government says it is doing one thing. It says it is improving the governance of Auckland. In fact it is undermining local democracy and weakening the governance of Auckland. If this Budget were a video game it could be called  
Grand Theft Auckland 
 or perhaps  
The Great Auckland Democracy Robbery 
. Although the Auckland Transition Agency is costing only $94 million—only—this Government is spending a lot more of Aucklanders’ money as it goes about setting up the super-city. I want to touch on some of those items. 
It is interesting that the Minister of Local Government who made his career as the self-styled “Minister for Ratepayers” as a champion for accountability and transparency has had to have every last little drop of financial information squeezed out of him over the last couple of months. As recently as 16 March the most that we knew about the cost of the super-city in Auckland was that $34 million had been loaned to the Auckland Transition Agency. Mr Hide said in the  
New Zealand Herald  
that he was unable to provide any more detail than that $34 million loan. Only 3 months ago he said that. On 25 May the  
New Zealand Herald  
reported that the super-city set-up costs had rocketed as it put it to $112 million. This was after information had been released under the Official Information Act. Then only a week later on 31 May the  
New Zealand Herald  
reported that super-city costs were up to “$200 million and counting”—$200 million. In the space of 2 months we have gone from a cost of $34 million to $200 million. 
What is interesting about this is that Mr Hide still denies the real costs of his super-city which are being picked up by Aucklanders. For instance he told the Local Government and Environment Committee last week that he does not consider the $14 million worth of work that he has asked the Auckland councils to do on the transition to the super-city to be a transition cost. The councils are doing it because they have been asked to by this Government but he does not consider that to be a cost of the transition. For some reason the Minister of Local Government does not believe that the costs of establishing Watercare Services a brand new water monopoly in Auckland that is being set up to provide waste water and water for the home which come to $26 million a year are a transition cost. Yet the establishment of Watercare has been mandated. The royal commission recommended that this Government adopt that policy. It is clearly part of the establishment of the super-city yet Mr Hide does not want to accept responsibility for that expenditure. 
We have also seen a huge blowout in the costs of integrating the computer systems for the super-city. It will cost in the region of $120 million or $130 million to integrate the information technology systems. The problem is so taxing that the Auckland Transition Agency will be unable to get the integration of the information technology systems done by the time that the new council will be set up in November this year. So what is Mr Hide doing? He is allocating another $66 million of Aucklanders’ money for the integration of information technology systems in the super-city. That will be spent next year by the Auckland Council. It is clearly part of the transition costs; we cannot have one unified council without one unified information technology system. It will cost about $60 million this year and another $66 million next year yet for some strange reason that no one else can fathom Mr Hide refuses to accept that that is a cost of the transition to the new super-city. 
It is very strange. Mr Hide said that he takes responsibility for the $94 million loan but he refuses to acknowledge that another $106 million for the establishment of Watercare Services for all the work that has been done by councils and for the integration of the information technology systems that will be completed next year is part of the transition cost. It is a very strange way to do accounting. 
The thing that really sticks in the craw for Aucklanders about all this is that they are picking up the tab but they have never been given a proper say. This is a super-city that they did not ask for. Rodney Hide has rammed it down their throats in an unbelievably undemocratic process over the last 18 months. “Mr 3 Percent” is he not? Or is he “Mr 2 Percent”? 
Hon Darren Hughes 
: 2 percent. 
PHIL TWYFORD 
: He is at 2 percent in the polls yet he is running a reform programme that is remaking local government in our country’s biggest city. He is ramming it down the throats of Aucklanders. He cannot tell them how much it will cost. He is deliberately manipulating the figures to present them in the best possible light yet all we know is that Aucklanders will have to pick up the tab. 
Another cost that Mr Hide has not discussed publicly is the cost of redundancies. Dozens of senior executives in the Auckland councils will be made redundant in the next few months. That is a fact. There is no question about it yet Mr Hide cannot or will not explain to Aucklanders what it will cost. Many of those senior executives have gold-plated redundancy agreements and we know that it will cost tens of millions of dollars but Mr Hide says that he does not have the figures. Frankly that beggars belief. He has been leading this reform process for over a year. He has the full might of the Government behind him and he has the resources of Treasury and the Department of Internal Affairs but he cannot tell Aucklanders what the budget for the redundancies of executives in the Auckland councils will cost. 
Mr Hide cannot tell Aucklanders what the savings will be from his super-city after a year of managing this process and he cannot tell Aucklanders what that will mean for their rates. There is no question that when the eight councils are amalgamated there will be many winners and losers when it comes to the new rating regime. Some people’s rates will go up and maybe some will go down but after a year Mr Hide cannot tell the people of Auckland what this experiment will cost in terms of their rates bill. What he has done is look after his own behind if you like in this process. He has engineered a moratorium that means that rates will not go up for Aucklanders until after the next general election. So the Auckland Council will not have the opportunity until mid-2012 to bring in a new rating regime which I predict will hit some Aucklanders very hard in the hip pocket.