28 Aug 2014

Auckland rates to rise in 10-year plan

9:30 pm on 28 August 2014

Aucklanders face higher rates rises over the next decade, and a stark choice about having to pay extra if they want all of the city's major transport projects delivered.

Auckland Mayor Len Brown.

Auckland Mayor Len Brown. Photo: RNZ

The council has proposed 10-year budget has two years of average rate rises of 2.5 percent, then rising to 3.5 percent.

Auckland mayor Len Brown is proposing cutting almost $3 billion from the current plan to invest $14 billion in new assets and infrastructure to match the more modest rate rises.

Ambitious transport projects like the $2.4 billion downtown rail tunnel pose a big challenge to the council.

The opening move in the nine-month debate of the so-called Long Term Plan includes splitting transport programmes into a basic package, which includes the tunnel, but an optional list will depend on Aucklanders agreeing to new charges such as fuel taxes or road tolls.

At a council meeting this morning, Mr Brown said without extra revenue sources, projects such as the north-western busway, the Penlink road, new Park and Ride facilities and new roads, would miss the cut.

"This will be the most important funding debate that Auckland has ever had," he said.

The mayor said the budget is prudent, with modest rates rises, a slightly lower cap on debt, but still making transformational changes to the city.

Today's proposal also includes a requirement for the council to reduce its own costs by $30 million a year more than currently forecast, with cuts in its planning and community development departments.

Mr Brown said the Government also needed to do its part, saying government properties were exempt from paying rates amounting as much as $300 million over the decade.

Law changes limiting council levies on new subdivisions had cut a similar amount from the council budgets.

The council would look at selling non-strategic assets, such as car park buildings, Mr Brown said. However, there would be no sale of the council-owned Ports of Auckland, or its cornerstone shareholding in Auckland Airport.

Mr Brown said both had doubled in value in four years, and the dividends they paid amount to 5 percent of council revenue.