Editorial: Once bitten, twice shy on another council tax

Auckland must ensure a "toilet tax" to clean up beaches is raised for the stated purpose. Photo / 123RF

If Mayor Phil Goff and the Auckland Council are actively considering a "toilet tax" to pay for a new sewer under the older western suburbs, it is bold indeed. The fixed charge suggested in papers released to National MP Judith Collins under the Official Information, would be a second new tax from the council coming hard on the heels of the regional fuel tax Aucklanders are now paying. Once bitten, citizens may be twice shy of giving the council another channel into their pockets.

There is nothing wrong with a new tax if it is for a particular project. The council is in the same position as a listed public company that is at the limit of it borrowing ratio and needs to go to the sharemarket for more capital. To attract that capital it needs to make a convincing case for the project, showing it is likely to pay a return on the investment.

The council is not a company of course, it has the power to raise extra capital compulsorily if the Government permits it to do so, as the Government did for the fuel tax. But the council should be no less obliged to put a worthwhile project in front of those obliged to pay the tax, preferably just one project. When it bundles a number of projects together to justify an additional tax, it becomes harder to see and measure the potential returns.

That is what happened with the fuel tax. Rather than being raised for one major project, such as the central rail link, the council "dedicated" it to no less than 14 other transport projects and most Aucklanders would struggle to remember any of them. All of them are ordinary incremental improvements to various modes of transport and none of them will finish in a way that will let the tax be removed. Clearly the council intends its fuel levy to be a continuing source of revenue.

Ratepayers must not allow that to happen with a "toilet tax" if it is adopted. It has been proposed as a way to finance a single major project: a large sewer called the central interceptor that would run from Western Springs to the Mangere treatment plant and put an end, hopefully, to the overflows that pollute the western beaches after heavy rain.

Aucklanders have been living with the problem for at least 40 years. It was supposed to be fixed long ago by the former Auckland City Council. If the central interceptor can fix it for $1.2 billion, paid with a fixed charge on households over 25 to 40 years, Aucklanders should support it. But not before insisting it meets those conditions, being dedicated to the one stated project, being capable of fixing the problem, and have a stated limited life.

Otherwise it could all too easily become an indefinite source of revenue for all sewerage repairs and extensions. That risk is high because the charge is proposed as part of a divestment of Watercare shares to a new Crown-owned entity. If that means Watercare's role would be restricted to water supply and drainage would become the task of the new entity, then a new general wastewater charge would seem to be needed.

It is early days, the papers released to Collins relate to proposals under discussion by the council, Watercare, consultants and the Treasury. But a solution to coastal pollution is urgent, especially after last summer's warnings from the council that urged no swimming at numerous beaches around the region after rain. Auckland needs this project as soon as possible but also needs to make sure it does not give the council another blank cheque.