new auckland

Old taxes, new taxes fund Auckland’s growth

The Government's come to the party with rail money. Auckland ratepayers and drivers will be chipping in. Now the city's Mayor Phil Goff wants big business to do its part. 

In laying out the city's 10-year plan he has challenged the private sector to step up, especially when it comes to issues such as homelessness. Goff has told the Council he has been getting "some really good responses" after approaching big business, and asking them to step forward. "Put the money down do something to help the nature of our city," he said. 

On homelessness, the council has done what it believes it can in terms of helping the Auckland City Mission with its accommodation plan for 200 homeless people. Goff says their grant is effectively the value of returned development contribution fees and resource consent costs for the redevelopment of its site, calling that "important but symbolic". 

"Should we do more? I'd love to do more," he said. 

This council is doing more, and Goff, while sharing the credit around at last week's big finance meeting, has been employing his political wiles to get it done. He knew Aucklanders wouldn't swallow huge rate rises, and technically has kept his campaign promise with just a 2.5 percent increase in each of the next two years. But he's convinced residents to pay anyway - selling the idea of clean beaches, smoother transport systems and environmental band aids as "targeted" rates. He has washed the shine off Auckland's image with evidence of polluted beaches and overflowing sewers, crowded homes and clogged motorways - and now he has the funds to start polishing it up again. 

Goff told the Council this plan is about "transport, water, and the environment generally - and those three things together (provide the infrastructure to) allow us to do something about housing". 

He reminded councillors they all came to the council to make a difference. "We all came here motivated to create a better city ... a world class city, a city that's vibrant, interesting exciting and inclusive." Goff's summary of the budget said it focused on building the infrastructure the city needs to deal with unprecedented population growth. 

It sets out $26.2 billion of capital investment over the next decade. 

+ The 11.5 cent a litre regional fuel tax that kicks in on July 1 will form part of $28 billion earmarked for new transport projects that have been outlined in the ATAP.  "If we'd voted down the regional fuel tax we would have been stand-still, do-nothing, watch as the city deteriorated around us," Goff said. "Aucklanders have got in behind us by a margin of two to one." He describes the changes possible from this extra cash as "transformational", saying it allows the Council to be far more radical in tackling the city's transport crisis. 

+ There is a targeted water rate of $452 million which will pay for the new Central Interceptor in 10 years rather than 30. "How can we be a world-class city when every time it rains, waste water discharges into our harbours?" Goff asked. This money is specifically to fix infrastructure to stop waste water overflows. 

+ An environmental targeted rate will raise $311 million - fighting kauri dieback is a priority, along with weed and pest control. Councillor Daniel Newman criticised it, saying you couldn't stop a feral pig running through the Waitakere Ranges spreading dieback disease.

+ Some areas of the city will see an increase in their refuse targeted rate to fund food waste collection services.

Goff likes targeted rates because they are transparent - they require the rates revenue raised be spent specifically for the purpose for which it was collected. He says accountability to ratepayers is critical, and the public preferred their money didn't go down a big black hole under a general rate. Finance committee chair Ross Clow said there clearly seems to be an appetite for them, with people liking the ring-fencing of money. 

+ Money's being squeezed out of Airbnb operators. Goff: "Every hotel and motel pays business rates and you have to have a level playing field." He said introducing this change could reduce the burden paid by traditional accommodation suppliers by 25 percent - and he noted it is not an additional rates grab but a redistribution. It won't happen this year as the Council hasn't properly consulted on it yet. Clow reminded councillors they were not allowed to debate the controversial bed tax, which is currently being challenged in court. 

+ $374 million in amalgamation-related savings has been identified, "not by cutting services but by doing things more effectively". 

+ Auckland Council Investments Limited (ACIL) is being disbanded, which saves $8 million. Goff says this doesn't affect Auckland International Airport at all but potentially it could affect the Port. However he says the Port is not worried about the move and sees benefits in it, in terms of closer collaboration. The right of the Port to make commercial decisions independently of the Council is protected.

+ There is a $40 million "climate change response fund" - half of that is for repairs to infrastructure hit by storms, the rest for "pro-active" monitoring and funding. Given Auckland's recent storms, and its 3200 kilometres of coastline, that's chump change over 10 years, but "I don't think that will be the last figure we see ... climate change will be the defining issue of our time and we'll need to do more," Goff said. There is also $90 million for coastal asset management. 

+ Stung by criticism that sport, art and culture had been pared back too far, there is a $120 million contestable fund up for grabs ("this enables us to make some real inroads into some long-standing problems there") and $20 million for the Auckland Art Gallery, which has been operating on the sniff of an oily rag. There is also increased funds for the Zoo to repair "ancient" infrastructure - nearly $25 million. Swimming pools get $25 million. The central city's works budget increases by $55 million to support the America's Cup and APEC, both happening in 2021.

+ Surf life saving and the marine rescue centre get extra funds. "A city does not exist solely on the basis of infrastructure," Goff said.

+ Funding for the Ngāti Whātua Orākei Reserves Board includes a $1 million capital grant for the construction of an iconic Pou at the harbour entrance.

+ There was $1.4m for the Council's smokefree by 2025 plan, but Councillor Chris Darby said that was half of what had originally been earmarked. He argued (on World Smokefree Day) the reduced amount would not deliver on expectations. A revised figure of "up to" $2 million was agreed on. 

+ Councillor Christine Fletcher argued for more money for Citizens Advice Bureaux pending a major review of the organisation next year. A one-off grant of $200,000 was approved.

Goff made assurances to councillors that not everything was set in concrete. “The 10-year Budget is a great blueprint for the next 10 years. It will be altered in the annual plans in the next few years as we find things we could do better.”  

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