Super-city 'costly in money and jobs'

Last updated 05:00 13/06/2009

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Millions of dollars and thousands of jobs will disappear from the Auckland economy when the super-city becomes a reality, an economics consultant says.

Unifying Auckland local government should shed between 539 and 817 council staff. That, along with centralised purchasing from suppliers, should save the super-city council $181 million a year compared with what the present eight councils spend, said Auckland University public economics teacher Rhema Vaithianathan.

But she said there would be transition costs of between $574 and $753 per ratepayer.

Dr Vaithianathan said the burden of rates often fell on residents rather than ratepayers through increased rents and the cost of services, so the transition would cost every man, woman and child in Auckland between $220 and $289 equating to about $400m throughout the region.

The effect of the retrenchment in council spending and the short-term cost of transition would potentially put another 1600 jobs at risk and take an estimated $600m out of the gross domestic product of the region.

Dr Vaithianathan said because the Government's plan did away with the second-tier councils proposed by the original royal commission, more amalgamation was expected to bring more savings. But the changes would cost more during the transition.

Her report called for a detailed cost-benefit analysis.

The impact on ratepayers would vary city by city, she said. Since Auckland city council spent the most per resident, its ratepayers might get a reduction while Manukau's got an increase.

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- The Dominion Post

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