Auckland mayor Wayne Brown has proposed an average rates hike of around 4.66 per cent for ratepayers as the council budget shortfall balloons.

That would see the average household facing an additional $153 on their rate bills.

Auckland Council is deliberating on its budget for the 2023/24 year today.

It is understood the Brown will propose a general rates increase of 7 per cent - well above the 3.5 per cent previously signalled.

That would be mitigated by reducing some targeted rates, bringing the total rates increase for the average household to 4.6 per cent.

Auckland Council is facing $295 million shortfall - much larger than the projected shortfall of between $90m and $150m.

This blowout in costs was driven by high inflation and rising interest rates.

Brown said in a statement this was the first time an Auckland mayor has proposed a rates rise below inflation.

“My proposal would reduce rates in real terms and assist in the national fight against inflation, supporting Auckland households through the agony of this cost-of-living crisis and helping to protect the essential services that Aucklanders value,” Brown said.

Mayor Brown has described his first six weeks in the mayoral office, and the massive push to get his budget proposal finalised this week, as “a battle against rate rises and service cuts”.

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The key financial levers include cost savings, efficiencies, the sale of non-strategic assets and, possibly, some borrowing, Brown said.

A $295m budget hole threatened total rates rises of over 13 per cent, which Brown said was completely unacceptable and would not happen under his leadership.

The total rates a household pays is a combination of general rates and various targeted rates depending on where the property is in Auckland.

The mayor’s 2023/24 budget proposal is seeking record savings of $130m across Auckland Council and council-controlled organisations, including Auckland Transport, Tataki Auckland Unlimited, and Eke Panuku Development Auckland. Included in this are operational savings of $60m that will focus on management and unfunded strategies, rather than service cuts.

Local boards will be asked to play their part in plugging the $295m budget hole by finding 5 per cent in cost savings from their total annual funding.

The proposed sale of Auckland Council’s 18 per cent minority shareholding in Auckland International Airport Ltd could raise around $2 billion, thereby reducing the debt servicing cost to ratepayers by at least $88 million a year, Brown said.

“We want to make systemic changes to ensure there isn’t a rates rise shock in 2024. If tough decisions and trade-offs are not made now, Auckland households may still face a hefty rates rise next year,” Brown said.

The 2023/24 budget proposal will go to a Governing Body meeting on December 15 and consultation next year.