Auckland councillor Desley Simpson says modelling by the council shows a 14-day alert level 4 lockdown due to Covid-19 would cost the supercity's economy $1.4 billion.
An alert level 4 lockdown due to Covid-19 costs the super city's economy $100 million a day, Auckland councillor Desley Simpson says. Photo: LDR / Supplied
Simpson is the chairwoman of the council's finance and performance committee and said the figure is based on work done last year.
"Does it worry me? Of course it does," she said. And she said it will also be a serious concern for many of the city's residents and business owners.
"As the chair of the finance and performance committee it's also my job to work with the finance team to ensure the financial stability of the council."
But Simpson said it's still too early at this stage to say how much the latest lockdown will ultimately impact on the council's finances.
"Right across the organisation we are working pretty urgently on this," Simpson said.
She said the council's recent 10-year Recovery Budget factored in a future resurgence of Covid-19.
"So we have budgeted for this to happen, but at this stage we just don't know how long it will last."
Simpson said she's expecting a more comprehensive report from council staff next week.
Desley Simpson (right) says she is expecting a report next week on the financial implications of the latest lockdown on the council's finances. Photo: LDR / Supplied
Auckland Council took a $450 million hit to its revenue in 2020 due to the pandemic and has only recently completed a $120m cost cutting exercise and axed 643 jobs.
Auckland Transport said this week it could lose $5m a week in lost fares due to the latest alert level 4 lockdown.
Manurewa-Papakura ward councillor Daniel Newman said it's still early days in terms of the latest lockdown, but any sustained contraction in Auckland's economy will inevitably hit the supercity's revenue base.
"Probably the most likely scenario will be a reduction in revenue from the regional fuel tax and farebox recovery as people stay at home rather than drive and use public transport," he said.
"So Auckland Transport will immediately feel the financial squeeze, as well as Waka Kotahi as revenue for the National Land Transport Fund (NLTF) drops off."
But he said as Auckland moves into recovery, it is vital that basic services and projects funded by the council are preserved to save jobs.
"Ensuring that all New Zealanders can earn their bread needs to be at the core of decision-making at every level of government."
But he said his immediate priority is to support people in his ward affected by the lockdown.
"People need to stay in their bubble and stay safe. Saving lives is the number one priority."
In a statement, Auckland Council Group chief financial officer Peter Gudsell said: "Our Recovery Budget (10-year Budget 2021-2031) anticipated ongoing impacts of Covid-19 disruption over the next three years.
"Different scenarios were looked at through the development of our plan and budgetary headroom was maintained to cope with further shocks.
"Auckland Council's finance team is continuing to monitor the situation and the impacts on the council's finances. It is too early to estimate what this lockdown could mean for our revenues and costs and will depend on a number of different factors."
He said the council's finance and performance committee will be updated as required to ensure councillors understand the impacts and can make any decisions that are required.
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