15 Apr 2018

Insight: Digging deeper - Will residents pay up to fix Auckland?

From Insight, 8:10 am on 15 April 2018

Aucklanders will end up digging deeper into their pockets from this year to tackle the city's problems, but the shake-up of the funding system is far from a done deal.

New layers of rates are being considered by Auckland Council including one specifically aimed at trebling the pace of overhauling outdated storm-water networks, which carry sewage onto beaches and into streams after rainfall.

Behind closed doors councillors and staff are also poring over the details of what Auckland's new regional fuel tax could deliver, and how much to add in new layers of property rates.

It's the biggest shake-up of Auckland's funding since the super city amalgamation in 2010, as the council tries to boost capital spending over the next decade by around $6 billion more than previously planned.

The proposed Ten Year Budget has been pitched as a mix of catch-up from decades of under-spending, but also to face up to the cost of new environmental threats.

30km from the CBD morning rush hour traffic crawls out of Kumeu, an area the local board wants to improve with a local transport rate.

30km from the CBD morning rush hour traffic crawls out of Kumeu, an area the local board wants to improve with a local transport rate. Photo: (RNZ Insight/Todd Niall)

The biggest impact is the replacement of the three-year-old interim transport levy of $114 per household per year, with an 11.5 cent-a-litre fuel tax, more than doubling dedicated transport revenue to $130-$150 million a year.

Aucklanders are also being asked to support a water quality targeted rate, to complete in 10 years rather than 30, the separation of old storm-water and wastewater pipes, which render many beaches and waterways a health hazard.

For an average-value $1m home, that would cost $66 a year, and a choice of either $21 or $47 as a natural environment rate to tackle kauri die-back and range of pests and invasive weeds.

Mayor Phil Goff enthuses about the proposals.

"Some of the things we are doing are absolutely transformational," Mr Goff told Insight.

"We've taken it out of the too hard basket, and said to Aucklanders, 'we in this generation cannot simply pass this problem on to the next generation to solve'."

But the arithmetic of how it all works is deeply entwined with Mr Goff's 2016 election promise that general rates should not rise more than an average of 2.5 percent.

And that, for some, is a problem.

"It might help people see where the money is going so might ease the pathway for paying more, but it couldn't be described as overwhelmingly ambitious, it's just a good start," said former local body politician-turned executive director of the Environmental Defence Society, Gary Taylor.

 Meeting with adults in a classroom

Avondale residents turn out to hear how planned new targeted rates will work Photo: (RNZ Insight/Todd Niall)

Year one of the budget is carefully constructed to fit the 2.5 percent narrative.

First, subtract the $114 flat transport levy on households, then add an identical sum split between the water quality and environment rates, then add 2.5 percent.

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The political nicety is that whatever impact the regional fuel tax has on households, and for some it will be considerable, it can't be brought into the rating equation.

The extra revenue from the regional fuel tax has turned into a motorists' double whammy with the government's unexpected unveiling of a nationwide lift in fuel excise duty of 9 to12 cents-a-litre.

There's hope the gain in terms of transport improvements, will offset the pain.

health risk sign

Up to 16 Auckland beaches have closed due to sewage overflows following rain Photo: (RNZ Insight/Todd Niall)

"My sense is that if people can see that projects that would otherwise be a pipe-dream can be brought forward, and delivered - they will have a rather different attitude to paying," said Peter Winder, a local government consultant who led work for the former Auckland mayor Len Brown-led council on new ways of paying for transport.

"If you can see you are getting what you want on the other side, then there will be a grudging acceptance."

To make the environment rate fit the equation, the council dropped an option for a higher $67 contribution for an average value household, which would have delivered an extra $4.5 million dollars.

"If they set the budget at the $47 (average household) rate, that'd be really disappointing," said Margaret Stanley, an associate professor in the University of Auckland's School of Biological Studies.

"To stop the decline of biodiversity they are going to have to divert money from elsewhere."

Mr Goff's 2.5 percent mantra becomes harder to maintain if the budget continues as planned into Year Two.

Then, residential rates rise by 3 percent, followed by proposed 4 percent rises in subsequent years.

New waste management charges are planned as a new collection system rolls out across the region, and in the rural Rodney Local Board in the north and northwest, the board wants a $150 local transport levy to accelerate projects.

Mr Goff insists his promise holds - saying it was made only for his first three-year term - although that limitation is not mentioned in his 2016 election material.

The government has also thrown a curve ball on transport. Just days after public consultation closed on Auckland's regional fuel tax - with opinion divided - the government unveiled its own 9-12 cent-a-litre nationwide proposal spread over three years.

Whether that will shake the resolve of Aucklanders and their councillors - to pay a bigger share themselves - will be known in June, when final decisions on the council's budget are made.

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