The magic of building Rodney’s Super City – the costs are mystifying but “miniscule”

Rodney Hide is gung ho about what he has done and is doing for the restructuring of local government in Auckland and bringing relief to ratepayers.

He’s much too gung ho for Alf’s liking, actually, and is bound to come a cropper.

The final legislation setting up the rules and responsibilities of the Super City has been passed into law after Parliament passed the Bill that finalises the roles of local boards and the council’s management of its companies.

More ominously, as TVNZ reports:

There are claims this morning that the costs for setting up the Auckland Super City are spiralling out of control.

Maybe. Maybe not. These claims are coming from the likes of the Labour lot.

But Hide is being disgracefully cavalier about them.

Radio NZ reports today
he is still unable to put a dollar figure on how much the new Auckland super-city will save.

Mr Hide appeared before the Local Government Select Committee on Thursday.

He told MPs the cost of the transition will be $160 million, much of that for new information and technology systems.

Mr Hide said he could not put a specific number on how much would be saved, but insisted efficiencies would be made.

But as Alf pointed out to his constituents in this blog some months ago, Hide is the same bloke who demanded rigorous cost and benefit data on the matter of the emissions trading scheme (for which Alf applauded him).

Alf was disappointed by Hide’s failure to bring costs into the accounting for his Super City:

When super-city plans were unveiled a few weeks ago, this blog observed there was an absence of cost-benefit numbers, but expressed confidence Hide would come up with them.

Not only is he fudging the issue. He is giving Labour’s Phil Twyford a bloody firm platform for political grand- standing. Letting a Labour lightweight look good is unpardonable.

Hide was chided by Mr Speaker at that time for failing to answer a straightforward question: how much will the Government’s super-city proposal cost to implement and to run annually.

The best the public got from Hide then was that the costs would be “miniscule”.


What does that mean?

Alf draws attention to this NZ Herald report that Aucklanders are shelling out $200 million to build the Super City.

The latest figure includes an admission from Local Government Minister Rodney Hide that it will cost $125.7 million, mostly in information technology costs, to get the new-look council up and running.

Mr Hide has previously been tight-lipped about the implementation costs, which come on top of $34.4 million of operating costs for the agency designing the Super City.

Other costs are $26.5 million to set up a mega-water company and $14.2 million by the region’s existing councils. The councils’ costs and setting up Watercare will be funded out of current budgets.

Mr Hide, who has been careful not to promise immediate savings to ratepayers from the Super City, said the transition agency and implementation costs of about $160 million were below the mid-point of the $120 million to $240 million estimate by the Royal Commission on Auckland Governance.

He did not take into account the cost of setting up Watercare and councils’ costs.

Opposition MPs this week put it to Hide that redundancies would cost about $45 million, including payouts to departing chief executives.

But Hide – it seems – is saying we can forget about this bit of the costs.

Mr Hide said those arrangements were the responsibility of the councils that negotiated them.

Maybe so. But is it public money?

Yep. Sure is.

And should it come into the accounting of costs and savings?

Yep. Sure should.

But Hide simply huffs and puffs about being “disgusted” with claims the reforms could bring $47 million in redundancy costs.

The aforementioned TVNZ report says of that figure:

The number has been cited by Labour as a consequence of job losses as staff from existing councils are merged into the new set up.

Hide says Labour has simply made the number up and the Transition Agency hasn’t done any of that work yet. He says because no one knows who has a job and who hasn’t, it’s impossible to know what the redundancy costs are.

Right or wrong, however, he is charging on with the restructuring blissfully mindless (by his own admission) of all the costs but adamant there will be savings.

Alf’s recollection is that the builders of the Titanic were adamant it was unsinkable.

One Response to The magic of building Rodney’s Super City – the costs are mystifying but “miniscule”

  1. ford prefect says:

    Rodney Hide is keen for media to forget that at the start of all this stuff he was saying there would be savings to the extent that people’s rates would go down. He is strangely no longer saying so.
    I find myself in the midst of this shit-storm, and am working hard to bail before November 1. All employable people will be doing likewise I suggest – except the dyed in the wool local govt wonks who don’t have transferrable skills.
    But please also remember the wee man we love to hate is also this project’s fall guy, universally disliked even by his own sponsors and party members, and will be left dangling in the breeze by them as an acceptable loss in order to slide this thing through. He will be gone from view at the next election, and much to the dismay of Roy and Douglas that will be the end of ACT as a political force.
    National too will have its problems, as the unified residential rate comes into play after the election and will cause MUCH disquiet in the blue lanes of Remmers and Howick.
    The winds of change don’t just blow through the halls of musty old councils people, they blow down your street and will soon be ruffling hairpieces and fluffing bloomers in the halls of power…

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