Auckland Council votes for 2.5 per cent rates rise

Phil Goff says Auckland faces faces extraordinary levels of growth with 45,000 people added to the city each year.

Auckland rates will rise by 2.5 per cent this year after a feisty budget debate this morning between different factions on Auckland Council.

An attempt by right-leaning councillors for a 2 per cent rates rise was lost in favour of a proposal by Mayor Phil Goff for a 2.5 per cent rise.

Goff said the city had some hard decisions to make and "we shouldn't shy away from those decisions".

Auckland, he said, was facing extraordinary levels of growth with 45,000 people added to the city each year, infrastructure that had failed to keep up with that growth, all leading to unaffordability of housing and growing congestion on the roads.

"The problem is the city has limited ability to borrow with $1.7b being contributed to the City Rail Link. We are at the limit of our debt to revenue ratio," Goff said.

Senior finance office Matthew Walker said a 2.5 per cent rates increase would produce a balanced budget.

A 2 per cent rates increase would require savings of $7.4 million and cutting capital spending. A 3 per cent rates increase would raise $14.8m and enable council to borrow $39 million for new infrastructure.

Councillor Denise Lee, who put the amendment for a 2 per cent rates rise, said 90 per cent of ratepayers paid by instalment and the issue could not be divorced from how ratepayers believed council was tracking.

It was just a little while ago, she said, when rates rose by 10 per cent, saying "this year is the year to do the right thing".

Councillor Greg Sayers said the borrow, spend and tax them again is a recipe for disaster and will send Auckland Council broke, saying he was sticking with his election promise to set rates at 2 per cent.

Manukau councillor Efeso Collins said he represented the people who earned the least in the city, "but want to pay a little extra to make this city fly".

"We are prepared to pay extra so we get services that meet the needs of our community," said Collins, who backed a 2.5 per cent rates rise.

Councillor Richard Hills said people thought the council was not saving money, but it was saving $30m from this year's budget to achieve a 2.5 per cent rates rise.

Departments had "fear in their eyes" about what 2.5 per cent means, including cuts to jobs and programmes, Hills said.

The budget meeting is continuing. Items coming up include a vote on Goff's controversial "bed tax" to help fund tourism and events, and introducing a Living Wage for 2064 council staff.