ARC looks to drivers, property for cash

Motorists and property developers are potential cash cows for up to $36 million of extra annual funds the Auckland Regional Council hopes to raise for public transport.

The council has voted to seek alternative sources for extra operating revenue of almost $20 million a year for otherwise unfunded new bus, ferry and train services, and to underwrite a loan for a half-share of an estimated $486 million of capital spending on rail electrification.

A 40-year loan - subject to the council's approval of a rail expansion business plan yet to be received from the Auckland Regional Transport Authority, and agreement by the Government to pay the other half - would entail annual repayments of about $15.9 million.

Alternative funding sources are yet to be confirmed from a staff report due for consideration next month, but transport policy chairman Joel Cayford said yesterday that the three likely candidates were regional fuel taxes, property development fees and parking levies.

These are likely to be strongly opposed by such organisations as the Automobile Association and Property Council, but Dr Cayford told the Herald the financial burden had to be shared by those creating the need for a better transport system rather than just ratepayers.

"It is going to be partly user-pays, and partly exacerbater-pays - they are creating more demand for more infrastructure," he said.

He suggested the extra revenue could come from a combination of sources, although officials in 2003 calculated that a regional fuel tax of 5c a litre would alone raise $40 million to $50 million.

The quest for new revenue follows the council's commitment to keeping annual rates rises to an average of about 5 per cent for each of the next 10 years, and irritation expressed by Finance Minister Michael Cullen that Auckland was allegedly not doing more to help itself.

But the council does not want a repeat of a citizens' rebellion mounted against a 34 per cent rates rise in 2003, although it says 5 per cent increases will more than double to $122 million by 2016 the annual contribution ratepayers make to public transport.

That is not counting a contribution from its Auckland Regional Holdings subsidiary of almost $1 billion over 10 years.

Dr Cullen raised the possibility of a regional fuel tax in March with the Auckland Mayoral Forum, whose members are mainly in favour of the idea as a way of improving public transport before the possible imposition of charges to motorists on congested roads.

But the minister has also said the Government wants to concentrate on a "basic" rail upgrade for Auckland over the next three years, mainly through duplicating the western line and remodelling Newmarket station, and that electrification is not a priority.

The council hopes the transport authority's rail business plan may persuade him otherwise, and regional chairman Mike Lee said yesterday that its offer in principle to raise a loan for electrification was an important signal to the Government.

He acknowledged it was ultimately up to the Government, as owner of the railway tracks, to decide how to develop these.

"But essentially the ARC is putting its money where its mouth is - and it's a challenge for our partners to do the same thing," he said.

Mr Lee noted that the regional council had also decided to recommend to the transport authority that it include reopening the Onehunga branch railway line in its 10-year public transport network plan.

Another council priority is the provision of extra operating funds so the transport authority can bring forward its introduction of new bus and train services that would otherwise be delayed until after 2011.

The Waitakere and Manukau city councils have raised concerns that a $1.4 billion public transport funding gap over 10 years would mean unacceptable delays to providing buses to a new road-rail interchange in Henderson and to fast-growing suburbs such as Flat Bush.

AA spokesman Simon Lambourne said his organisation supported improvements to public transport, but motorists were already paying more than enough in taxes, and investment in more buses would be far more effective than "pie in the sky" rail projects.

The Property Council has warned that levies on developers will make it harder for young Aucklanders to buy their own homes.