Auckland households in for 7.6% rates rise in draft plan

The mayor says a fuel tax or motorway toll are among several options under consideration. Photo / Brett Phibbs

Targeted increase would bridge delay in motorway toll or fuel tax options

Auckland Mayor Len Brown this morning urged Aucklanders to have a say on a new 10 year budget, saying it contained some of the biggest decisions on the city's future.

"We're on the verge of getting the Auckland we want," he told a media briefing.

Aucklanders have until March 16 to have a say on the controversial budget that increases overall rates by 3.5 per cent and 5.6 per cent for households.

"This year is going to be one of the great seminal years in Auckland's history," Mr Brown said.

7.6% rates rise in Auckland draft plan

Household rates could rise by 7.6 per cent this year if the city adopts a motorway toll of $2 or a regional fuel tax to tackle the city's transport challenges.

The Auckland Council has released a draft 10-year budget for public consultation, which includes some difficult choices on the costs and services of the Super City.

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Among the options are paying less for transport and getting less, or a scheme involving a motorway toll or a fuel tax to raise $300 million a year to fill a $12 billion transport funding gap over 30 years.

The council is considering a targeted rate this year until revenue from tolls, a fuel tax or higher rates is in place by about 2018.

In the meantime, about $1.7 billion of $3.4 billion of additional transport projects over the next 10 years will be funded by debt.

Council finance officer Matthew Walker said the targeted rate would collect $30 million this year, the equivalent of a 2 per cent rise in rates, to fund the revenue shortfall.

This would raise the overall rates increase from 3.5 per cent to 5.5 per cent.

Household rates would increase on average from 5.6 per cent to 7.6 per cent.

New valuations and a lowering of business rates has led to higher rates for households.

The latest figures show inflation is just 0.8 per cent.

An extra 2 per cent rates increase would take the rates on a $750,000 home from $2274 to $2319 and for a $1 million home from $2904 to $2962.

Mr Walker said the $30 million targeted rate could become $60 million in year two and $90 million in year three and so on.

This scenario would see household rates rise by 22 per cent over three years.

Mayor Len Brown, who promised to hold rates to 2.5 per cent this term, would not answer questions directly about the possibility of a 5.5 per cent rates hike this year and debt rising by $1.7 billion to $12.5 billion by 2025.

"I know there is no appetite for large increases in rates or debt levels," Mr Brown says in a consultation document on the budget going to all households from today.

"It's important to remember this is only an option at this stage.

"As both funding options require legislative change, a targeted rate would plug any funding gap until a permanent funding system was put in place which we would expect to be no later than 2018," it said.

Another big feature of the budget is locking in funding for the $2.5 billion City Rail Link, which dominates the transport budget.

In a report on the budget, Auditor-General Lyn Provost said if the council proceeded with the City Rail Link and did not adopt tolls or a fuel tax, the transport programme would mean some transport projects not proceeding, lower maintenance standards, minimal improvements to roads, walking and cycling facilities, and could result in a reduction in service levels.

A revolt last year by the city's local boards has spared $800 million in cuts to community services, including town centre upgrades and sports park developments.

But the budget still includes a 7 per cent cut in running costs that will see less mowing of parks, fewer events in regional parks and cuts to library hours.