Auckland Council budget: Second day of debate on airport share ...

Auckland councillors are in their second day of debate over its next budget, with the proposed sale of the council's airport shares again set to dominate proceedings.

On Thursday, opposition to the sale saw Mayor Wayne Brown reduce the number of shares he wanted sold, from the council's full 18 percent stake to just over 8 percent. In return, more funding cuts and higher rates would be enacted.

Councillors responded by tabling several amendments in a bid to break the impasse, but it was possible the debate could spill over into next week.

Friday's debate started with a pitch from Manukau Ward councillor Lotu Fuli to keep the airport shares in exchange for a bit more debt and a slightly higher rates hike. She argued that while some have claimed keeping the airport shares is costing the city in debt interest payments, that goes for all of the city's assets.

North Shore Councillor Richard Hills asked what effect keeping the rates hike to under 7 percent, but taking on more debt and not selling the airport shares, would have on future years' budgets.

An official said the advice to the council was that up to $160 million in more debt was possible this year, but only as a "last resort", and would add pressure to rates increases in future years - possibly pushing it to between 13 and 15 percent next year.

Councillor Mike Lee suggested the figures were ignoring the dividends delivered by the council's ownership in Auckland Airport, which the finance officials rejected.

Waikato-Tainui is seeking a large shareholding of Auckland Airport shares if Auckland Council agrees to sell part or all its shareholding.

The iwi already had substantial investments in the airport precinct, including two hotels.

Executive chair Tukoroirangi Morgan said the shares would be an opportunity to settle outstanding Treaty claims in the Auckland region.

"Our current negotiator, who's been at the table with ministers and also with Crown negotiators, has on a number of occasions said to the government, buy the shares. It's a creative way of resolving - in the main - the major part of our Tamaki claim," he told Morning Report on Friday.

"The airport… it's a significant piece of land [to Tainui]. It's where we have a number of our major investments and we've always regarded the airport as a key gateway, not only for this country but a key gateway, you know, historically, for our people when they made first landfall here more than 1000 years ago… So these cultural, iconic parts of our history is hugely important."

Morgan said the Crown had a problem with few assets left in Tāmaki Makaurau to use in settlements, urging officials to "be creative".

He said Tainui would not simply sell of the shares again for cash.

"We buy to hold - we're an intergenerational investor. So the fact that we've got two major hotels out there at the airport, we have a marae that was built in partnership with the Airport Authority. We have an intergenerational commitment to making sure that what we have there is held for those who come after us.

"We're not in the business of selling shares. We would want to hold for those who come after us."

While Waikato-Tainui the first iwi to sign a deal with the Crown to settle historic wrongs, it has a few claims outstanding.

Howick Ward Councillor Maurice Williamson warned of a wild and rough ride at Friday's meeting.

A strong supporter of selling the council's airport shares, he described Thursday's budget debate as "whack-a-mole on steroids". He predicted more of the same for Friday, with some councillors happy to raise rates and others dead against it.

"There are a number of councillors around that table saying 'we think the rates could go up'," he told Morning Report.

"Now, they are already above the inflation rate that we've settled on yesterday, which I am very disappointed at. I want to keep rates to either inflation or below."

Brown's compromise proposal included hiking rates 7.7 percent - above inflation - rather than 6.6 percent, which about match it.

"But the problem with that argument… 'People in my ward don't seem to mind.' Well, there are some wards where the home ownership levels are very, very high and there are some where home ownership ownership is very, very low," Williamson said.

"I can tell you that in the Howick Ward, I get nothing but confronted by people in the streets saying, 'You guys better not stick my rates up beyond inflation. I'm struggling to make ends meet.'

"And I actually understand that people on fixed incomes are struggling to put food on the table and it's time we stop putting the rates lever. It's been above inflation every year, for year upon year."

Williamson said all council departments and boards need to cut their spending - rather than leaving local boards alone, as proposed by Fuli.

"To say to them, 'Oh, there's not any of your spending that's not good quality, it's all fantastic, we'll leave you with all that money' - I just, I'm sorry, I just don't agree with it."

He was not optimistic a deal would be reached on Friday.

"It's just impossible. It's impossible to tell 20 individuals all with different views in life. It's like herding cats. How do you get 20 people who have got very diverse views of the world? How do you get them all to come to the agreement on something? I don't know. I really don't."

Fuli's proposal includes adding another $140 million of "short-term debt", but keeping the airport shares - a "drop in the bucket" of the council's overall $12 billion debt, she said.

"It's not like the banks have said, 'If you borrow more than that, we're not going to give you more.' And our debt ceiling is actually 290 percent and we are nowhere near that in terms of our entire debt and our entire ability to borrow it.

"We're going to the limit that we've been advised we can go to before we start to become a little bit more risky… It's a manufactured ceiling. It's not been put on us by any institution. It's one we've put ourselves in order to be prudent and we've still got quite a lot of headroom there."

Fuli said local boards and community groups should not have their funding cut, pointing to the job they did during the floods earlier this year when "council ourselves failed".