Auckland Council budget: A 5 per cent rates rise - but wait, there's more

Tuesday, 1 December 2020

Waiheke Island has got six new fully electric buses to add to its fleet, with more coming over the next 12 years.(video from October 2020)

OPINION: Auckland Mayor Phil Goff will be harshly criticised by some for proposing a higher than pledged 5 per cent rate rise next year, to counter the revenue hit from Covid-19.

However Goff and the 20 councillors deserve credit on the face of it, for maintaining investment in a steadily growing city, already struggling to build the infrastructure it needs.

Making it a 5 per cent rise, instead of the pencilled-in 3.5 per cent, delivers an extra $25 million, every year to eternity, and enables a further $72m to be borrowed to build.

Goff decided against imposing a targeted rate to fund climate change-tackling initiatives, opting instead for a general rise in average rates, similar to what had been pondered for the dedicated rate.

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Ratepayers fund construction like this water reservoir at Pukekohe, an important economic boost in Covid-19 times

While there will be criticism for adding to Aucklanders’ costs in the uncertain economic future that Covid-19 has created, maintaining and even boosting the infrastructure build creates jobs that would otherwise not exist, and support household incomes.

It would be politically easy, but both short-sighted and economically damaging, to wind back the building of infrastructure, at a time when private sector construction may prove less robust.

The proposed budget, which Aucklanders will be consulted on early next year, keeps some heat on the council’s own operation.

It is finding $120m in savings this year, and the budget commits it to locking in $90m of those, at least for the next three years.

As with all budgets, in local and central Government, the devil is in the detail, and we have not yet seen that.

It is important to look at not only what is included in the budget, but what misses out.

Climate change is a critical area to watch. Auckland has committed to halving greenhouse gas emissions by 2030, and being net carbon zero by 2050.

Auckland Mayor Phil Goff (centre) with City Rail Link CEO Sean Sweeney, and former Transport Minister Phil Twyford.

It is easy to say, but hugely difficult to achieve, and there is no analysis yet of how the council’s plans for the next three years contribute to the region’s ambitious target.

The funding does allow the replacement of 600 diesel buses with zero-emission electric or hydrogen vehicles by 2030, an important symbolic commitment to how the world, and Auckland, needs to change.

However, an option which didn’t make the initial proposal would have cost an extra $23 a year per ratepayer and accelerated the bus replacement, quadrupling the reduction in carbon emissions.

Still to come are an unknown level of public transport fare increases, and an expected higher-than-usual increase in water charges, to help fund the accelerated speeding to boost supply in the wake of a drought.

Goff insisted he did not know what level of fare rise was being considered by Auckland Transport’s board, at almost the same time as he revealed his budget proposal.

Watercare, he said, had shared their thoughts on the possible level of increase, but he was not going to indulge in what he called “speculation.” The increase was Watercare’s business.

Both are important components in the annual cost to residents of the council “family” doing its core job, and will hit Aucklanders in their wallets.

It will be for Aucklanders early in 2021 to test the budget proposal, but it seems to have made a solid start.