Auckland rates rise on cards
Auckland mayor Phil Goff is at risk of breaking a key election promise to keep rates increases to 2.5 per cent or less.
During local body elections last year, he promised to keep rate rises to an average of 2.5 per cent over three years. He achieved 2.5 per cent in his first budget this year.
‘‘My preference is to maintain a 2.5 per cent average increase for the immediate future, but taking into account inflationary pressures faced by council,’’ Goff said.
However, the current 10-year budget assumed 3.5 per cent general rates increase and that higher than expected growth demands were putting pressure on council finances, Goff said.
As Auckland is faced with a population growth of 45,000 a year, this presented challenges in housing shortages and affordability, traffic congestion and pressure on the environment, Goff said.
‘‘The key to tackling these issues is our ability to lift investment in our infrastructure.’’
Use of targeted rates as well as Government partnerships would be essential, Goff said.
Every three years the council adopts a 10-year budget which will go out for public consultation in February and March 2018.
In a presentation to councillors on Tuesday on the 10-year-budget, Goff said major infrastructure spending exceeded the capacity of property rates to fund it and the debt to revenue ratio threshold limited Auckland’s ability to keep borrowing to pay for assets. He also revealed his vision for the city.
As Auckland’s population continued to grow, council was faced with a funding shortfall of $5.9 billion in transport over the next 10 years, he said.
Council’s Transport Alignment Project has set aside $27 billion for capital investment in the next decade.
The 10 year budget needed to consider where it sourced its share of the funds, Goff said.
Some form of road user tax was ‘‘essential’’, Goff said, despite central government ruling it out in February.
‘‘We can’t simply impose huge general rate increases to pay for infrastructure so some form of road pricing will be essential,’’ Goff said.