Auckland Council has approved its "emergency budget" today, which includes a 3.5 per cent rates rise, assets sales of $224 million and reinstating library cuts.

The vote at the finance committee was overwhelming, with just councillors Greg Sayers, Chris Fletcher and John Watson voting against the 3.5 per cent rates increase.

The budget contains cuts to services and projects to plug a massive hole that grew from $525 million due to the Covid crisis to $750m to provide extra water for the worst drought in the city's history.

It has resulted in the loss of 600 temporary staff and contractors and an announcement that the council will shed 500 permanent staff.

After some last-minute funding from the NZ Transport Agency, a further $40m will be spent on road safety and to pick up public transport shortfalls until December.

The council has also reinstated $450,000 to ensure library hours are not cut.

"Thank you, libraries. You rock," said councillor Cathy Casey, saying the public always rate them highest in everything the council does.

Household rates will rise by about 4.4 per cent and water bills are set to rise due to the impacts of Covid-19 and the drought crisis.

Rising waste management costs in different parts of the city and a plan to lower business rates by gradually increasing household rates means household rates will increase by between 4.3 per cent and 4.45 per cent under the 3.5 per cent rates option.

In dollar terms, the average household rates bill in the old Auckland City and Manukau City areas will rise by about $130 and $110 in other parts of the city.

A second option for a 2.5 per cent overall rates rise was dismissed and a zero rates rise was ruled out because of the severe impact it would have on services and investment in the city.

Mayor Phil Goff said the "emergency budget" was a tough budget - "we have probably never faced a tougher one".

"In a world where this pandemic is continuing to increase we will be incredibly lucky to avoid further outbreaks of Covid-19. What keeps us asleep at night is what would happen if we had to go into lockdown again," he said.

Goff said the financial impact of Covid-19 was $525 million a year, after the council had to find an extra $500m last year for increases in the City Rail Link.

"But wait, there's more," he said. The city had just had a 1-in-200-year drought adding another $224m to increase the water supply to stop severe water restrictions in summer.

Goff defended the 3.5 per cent rates increase - most feedback on the emergency budget was for a rates increase of 2.5 per cent or less - saying the best time to invest in infrastructure and create jobs is when faced with a recession.

What members of the finance committee said:

North Shore councillor Richard Hills

- a 3.5 per cent rates rise was a little bit of good in a whole lot of bad.

Finance committee chairwoman Desley Simpson - the budget provided for more than $2.5 billion of capital investment, "which is absolutely a key ingredient to Auckland's recovery from the impact of Covid-19".

Councillor Angela Dalton - money had been retained in Local Board's budgets which ensures free access to swimming pools, skate park guardians and a shuttle for elderly people in her Manurewa-Papakura ward.

Rodney councillor Greg Sayers - 75 per cent of his constituents wanted a rates increase of 2.5 per cent or less, saying increasing taxes at a time of recession only deepens the recession.

Waitemata and Gulf ward councillor Pippa Coom - a time to respond with more austerity or invest in the future of the city.

Maori statutory board chairman David Taipari - our people need the services.

Maungakiekie-Tamaki councillor Josephine Bartley - I know this is not a popular decision and people are going to be mad with us. I didn't do this role to screw over ratepayers but to make a difference.

- text by Bernard Orsman, NZ Herald