Auckland Council wages bill a whopping $2.1 Billion

Policy Parrot says:

This parrot has ranted on like a broken record in recent blogs about the excessive bloat of Auckland Council and it’s CCO’s.

WOBH receives a copy of the general pre-election report as blogged earlier today and the state of financial affairs is alarming. If this were a corporate business one would be selling shares before they are worthless.

Rather than comment on the expenditure, the income or the depreciation issues which we can tackle in days to come, the porky number that stood out the most was the amount paid out on staff wages. A whopping $2.1 billion dollars!

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That is outrageous.   

Auckland reports that income from rates was $1.4 billion and with other income sources the Council generated $2.9 billion total revenue.

That simply means Auckland Council is spending almost twice what it generates from rates on staff wages but more worrying is that it is spending 75% of its total income on staff wages.

75%!!!!!!! Time to start plucking out feathers.

Comparatively some of new Zealand’s largest companies with staff numbers each of 15-20,000 people spend between 20-28% of turnover on wages and salary costs according to annual reports and Wikipedia.

So how does Auckland Council justify 75% of it’s total income spent on wages?

That is – comparatively – three times the equivalent overhead and by default says Auckland Council is over –employing by a factor of three.

Auckland Council is a bloated fat pig of gluttonous excess where it concerns it’s staffing. The super city amalgamation should have resulted in substantial efficiency and it obviously has not.

It’s time for the National Government to stop the rot by demanding efficiencies and setting National benchmark targets that Councils must perform too including – % of income on staffing overheads.

 


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  • Jmac

    Hear hear!

  • Blue Tim

    I couldn’t believe my eyes. Obviously no worries about a living wage there then

  • Pumpedup

    First of all I do not have any time for the Auckland City council and in particular len brown or penny Webster. Quite frankly useless!
    However , as a business person I need to ask what the hell you are on about. There is a huge difference in wage cost depending on what business you are in and the biggest one is inventory cost.
    There is no real inventory cost in the council and the same goes for any service industry so Mr Whaleoil if you want to maintain any level of credibility you need to start comparing apples with apples or at least understand business fundamentals and models.
    Because service industries will always have a high wage cost to total cost

    • Bafacu

      That may be try, however any business (whatever the type) that spends 1.5 times their core revenue on salaries is in severe trouble. When business relies on non-core income to break even the next stage is generally a petition to liquidate!
      Especially one that needs to plan for costly core infrastructure (plant and equipment) to fulfill it’s obligations to it’s clients (us!).

    • Muffin

      Hi Pumped, I agree that different businesses have different levels of staffing costs, I am yet however to come accross any at that sort of level, and when I have they are insolvant and heading into liquidation. The coucil is there to provide core public services right? roading rubbish, sewer, water. Sewer and water are now controleld by watercare, I bet their costs are not included in this figure, Rubbish is contracted out to external firms, fine, but again their wages wont be included in this figure. so the wages we are talking about are the staff required for building consents, roading oversight (as the actual work is contracted) dog control, parks, and parking….. does that sound like a reasonable bill for that level of work? Also note that the road network and parks could be considered inventory, or at least a maintainable asset on the council B/S and so with a thinner wage bill there would be more for this.

      • Pumpedup

        To Muffin and Bafacu,

        No argument from me on anything you have said but WO used a comparison with a business for profit and manufacturing company versus the council

        Comparatively some of new Zealand’s largest companies with staff numbers each of 15-20,000 people spend between 20-28% of turnover on wages and salary costs according to annual reports and Wikipedia.

        So just making the point of the importance of comparing apples with apples.
        For the record I have had over 15 phone conversations with the council re my rates which on a rural property are now over $3000 and up 15% on last year with no services provided.
        And you are all right….its a tax
        however… I am still at a loss as to why the rates in constituencies outside Len browns areas are going up and his followers are going down

        • Muffin

          The council seems happy to reference private organisations to set their executive pay rates…….

    • What exactly does the council produce? Nothing. It has no competition, for anything. They are not a service industry, they are a fucking tax.

  • Pumpedup

    hey bafacu,
    not trying to justify council spending as i’m sure I like all agree its stupid.
    But the comparison WO is making between the council and companies selling boxes is also ridiculous. Just saying.
    In fact in a multi national, inventory cost is 45-50% and SG&A around 25%.
    Add the two together and you get 75%

    • rat

      Cameron has confused Inventory costs (and other costs) with Wages, this is only a cash flow, and is in the correct format (as opposed to a Financial Performance format).

      Pity, because its a real waste of a rant

  • le sphincter

    Doesnt seem right 8k employees at $50 k average ( a lot of clerical staff) comes to $400 mill. Nothing like $2 bill

    • And yet there it is in the accounts released by the Council. Why don’t you read before you open your gob?

      • Timboh

        Surely you meant opening the other end?

      • Rat

        good thing you dont pay rates then

        • O RLY…I’m no Penny Bright

          • rat

            no you are not a penny Bright, she owns her house

    • Rat

      Yes you are correct. From the Annual Report Employee wages and salaries were $427 million.

      Page 61

      http://www.aucklandcouncil.govt.nz/EN/planspoliciesprojects/reports/annual_report/Documents/annualreport20112012vol3.pdf

      Cameron seems to have confused suppliers ( those are external people the council buys stuff from there Cameron, you know like petrol, power, telephone, materials etc etc etc ) with Wages Only.

      • Pumpedup

        Nice to have some balanced commentary here.
        Almost decided to delete this link from my favourites on the basis that a lot of commentary starts or ends with 4 letter words beginning with “C” of “F”
        Reminds me of when I lived up north

        • Rat

          Thanks Pumpedup

          You will find a lot of financial misinformation here…well not so much misinformation which is deliberate lies, but more of nativity

          • Rat

            oppps..sorry..spelling mistake..I’m in so much trouble now

          • At least I’m not afraid to use my own name. The numbers are the numbers…no lies there. Perhaps you are just bitter because of your own personal situation and animosity towards me.

          • Pumpedup

            Best form of defence is attack… Being a little precious aren’t you Cam?. My name is Steve… by the way

          • Travis Poulson

            “My name is Steve… by the way”

            Aaaaaand your point is?

          • Lion_ess

            The point is Ratty has climbed onto Pumped Up and they’re coupled bare-back to “get” Cam in tandem, aye Steve?

          • Travis Poulson

            Apparently I’m not yet drunk enough for this conversation.

          • rat

            exactly…’and the point is ?”

            tis a non issue

          • Travis Poulson

            Responding on behalf of others now? Aren’t we the little centre of the universe then.

          • rat

            I was agreeing with you

          • Wasn’t talking to you, no problems with what you are saying. I was talking about Rat…

          • Rat

            yes, but he made an excellent point about you

          • rat

            yawn yawn..use own name blah blah blah , so what ? , that isnt an issue, I’m just pointing out your complete stupidity about your numbers,

            and ha ha, personal situation and animosity.

            yup..I take it that when someone shows you up,you turn around thinking they have it in for you.

            Thats just being paranoid.

            next up will be the ‘obsessive’ card

          • Sounds like your head needs another shave, try a bit closer this time.

          • rat

            cant you respond on your mistake in your misinterpretations on the forecasts ?

          • Muffin

            Are you really so conceitedly stupid? You sound like someone who hasn’t compiled any financial reports in their life but still knows all there is.

          • He could barely string a sentence together either via speaking or writing.

          • Rat

            Speaking ?

            You have never met me

            Cameron, do you know the difference between wages and suppliers

          • le sphincter

            Suppliers are anyone whos paid through an invoice!
            Simple.

            of course WO, knows that as hes “run a few companies”. End of story.

      • Clever Harry

        Council doesn’t spend $1.5b on suppliers. If they do they are being ripped off. Gold plates pens and gold leaf notebooks.

        • Joes

          Admittedly I haven’t read the reports but my guess is that suppliers include contractors for every public service in Auckland, so would be no need to die in the ditch for Cam on this one.

          • le sphincter

            Especially not if you you are using this as an example of council incompetence. best to get your own figures totally correct first other wise you end up …..

      • Muffin

        That’s not the case rat, it’s where they sub contract functions rather than employ in house, if you think there is 1.5 billion in gas and telephone your too stupid to comment on financial statements. Think outsourced engineering, planning, legal and rubbish and roading, then you see the wages are just the in house plebs.

        • Jack Spratt

          So true. There is no way gas, mobile phones and the like add up to billions or if they do I Amin the wrong business.

          • You are in the wrong business…the ratepayers are being taken for a ride

          • Rat

            Made it better for us Ratepayers Cameron..

            Stand for Mayor.

            Cameron for Mayor !! fuck, I’ll even volunteer with your election work

        • Rat

          thats the point

          Suppliers in this thread DOES include contractors.

          It pays to do some historical homework on the previous years financials and compare apples with apples.

          Cameron sadly for his sake has failed to do this, he has concentrated on a forecasted cash-flow, which for all intents and purposes, has consolidated all operating costs as payments to employees and suppliers.

          Which is correct in its presentation for full reporting entities presentation.

          But completely fucked up in its interpretation

          • I know all about the contractors, especially about the parks contracts. I know that the contractors are taking the piss, I also know where the council is being seriously ripped off in roading…you should stick to…oh wait what do you do these days anyway?

          • rat

            I dont think you know anything about contractors due to your ridiculous post.

            My day job is good, really enjoying it.

            Do you have a job yet , or are you making it up as you go along ?

            And I do stand by my offer about you standing for Mayor, obviously you know where us ratepayers are being ripped off, and it would be nice to see a non-ratepayer advocate for ratepayers like me, it gives a bit of objectivity and integrity to the whole governance thing.

            Hell, a year ago that logic would have seen you Minister of Revenue.

            Stand for Mayor Cameron.. Auckland needs you

          • le sphincter

            of course they are being ripped off. HEB and so on doing liitle footpath repairs when some local two man concreter could do the job.
            But they are in no position to do otherwise, its put out for tender, the contractors work out whos getting it and the prices reflect it.
            No consideration at all for the certainity of getting paid.
            I would cut all tenders by 20% and they would still make a good profit

  • IWantToBeLikeMallardOneDay

    What the hell are all of those people doing?

  • Gotastiff

    Looks like a lot of Council peeps have commented here under pseudonyms. Pity they are defensive. Hardly a surprise.

  • DespicableMe

    It doesn’t matter if WO and PP get the numbers wrong, and that’s debatable, the point is not lost. Council is spending too much money and if it keeps up this it will become the Detroit of NZ.

    • le sphincter

      getting it wrong is just stupid , if you are trying to prove others incompetence !

  • Clever Harry

    Joes – you are wrong. Council pays for services through its asset and infrastructure expenditure. Big capital ticket items are elsewhere in the ledger and the report shows this.
    No suppliers are for odds as sods, contract consultants and so on – most of whom are ex employees.
    They definitely don’t spend that much on those items. The Unitary Plan for instance has a cost of some $40m including staff time and all consultants.
    The ticket is staff costs.

    • le sphincter

      Dont be silly, its standard form that accountants use. Big ticket items are included , thats why its over $2 billion

  • Finance Guru

    Arguing over the precise amount is semantics. What we know from WO today is Council is spending way too much money, is in debt, over staffed and spending more than core income. That is a fiasco.
    It is interesting to note that Detroit’s debt is roughly 2.2 times Auckland Council’s so it does not take much frivolous expenditure to tip a Council into trouble.
    Auckland Council is walking the precipice edge…

    • le sphincter

      John banks last council ratcheted up the debt before the super city took over. Wanted a lot of prestige projects like $120 mill on extensions to Art gallery, another $100 mill on Viaduct events center, all with borrowerd money, as they didnt want to raise rates to pay for it

  • surfisup

    There is nothing that can be done. Vote a new mayor and they will continue with status quo.

    It really is pigs in the trough at council and democracy does not apply as it is almost impossible to change this culture.

    • rat

      As mentioned in a previous thread…

      Cameron for Mayor !!!

      again for about the 20th time, I am prepared to stump up with the $200 deposit for that purpose.

      What say you Cameron ?, put that hard well researched investigative research into a practical use.

      Stand man…stand, as the most popular blog in the Country you should win by a landslide

      CAMERON FOR MAYOR !!!!

      • Travis Poulson

        Quiet day a the office was it.

        • rat

          its 10:30..at night

          I have no idea what office you are working at during this time.

          But I am not at the office

          • Travis Poulson

            No, but then you and I both know you’re just being pedantic as you’ve been at it all day.

          • Rat

            All day ?

            Sorry, I had a job during that time

          • Muffin

            Trav I think this guy is so dumb he must work in upper council management! Maybe planning or recruitment?

          • Travis Poulson

            He’d like you to think so.

          • le sphincter

            Actually its upper council management who generally are clued up. Its the drones way way down who blindly follow “the rules” without knowing what they mean.
            So many people used to get a building consent issued by the old Department of building and housing as the Auckland City council couldnt even follow the simple rules from DBH

        • rat

          So I take it you are not supporting Cameron for Mayor

  • Nick K
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