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.

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