How Phil Goff plans to keep rates down
New Auckland Mayor Phil Goff's outlined how he plans to keep rates in check - fuel taxes, targeted rates on large-scale developments and a visitor levy.
Mr Goff promised during the mayoral campaign earlier this year to keep rate inflation to 2.5 percent. Rates have gone up at varying speeds in different parts of the city since the formation of Auckland Council six years ago, some areas hit harder than others.
"Ratepayers have shouldered the responsibility for the growth of our city and cannot be expected to continue to do that on their own," Mr Goff said on Monday.
To prevent a shortfall in the council's budget, Mr Goff is proposing raising $30 million a year through a levy collected at hotels, motels and bed-and-breakfast operators.
"Accommodation providers and other businesses benefit most directly from the funding council puts into attracting visitors to the city and supporting major events," says Mr Goff.
"This proposal shares that responsibility more fairly across all of those who benefit from living and doing business in our city."
The council estimates this would add between $6 and $10 to each visitor's stay, per night, and said it was "common practice in OECD countries".
Auckland Tourism, Events and Economic Development would use this money, instead of being funded through general rates.
Mr Goff also wants the Government to agree to let Auckland Council implement a fuel tax "to help close the $400m gap in transport infrastructure funding identified by central government and Auckland Council under the Auckland Transport Alignment Project".
Earlier this year Mr Goff said it would set at around 10c a litre, putting up prices about 5 or 6 percent.
"We know that when the population grows by 45,000 a year, the Government does very well out of that - it gets the income tax, the GST, the company tax. Auckland gets the cost of providing the infrastructure," he told RadioLIVE in September.
Prime Minister John Key has previously ruled out fuel taxes specific to Auckland, saying it would create "anomalies of where the demarcation boundary was".
Transport Minister Simon Bridges isn't keen either, but seemingly more open to the idea. He called the gap between what Mr Goff wants and what the Government will allow "not insurmountable".
The third moneymaker Mr Goff has proposed is a targeted rate on large-scale developments to "pay for major new infrastructure, increase Auckland's housing supply and discourage land-banking".
"Landowners pay nothing while they hold their land in an undeveloped state," Mr Goff's proposal reads.
"Where [the existing] charges are not adequate to cover the cost of providing infrastructure to service a particular development, that creates a funding challenge for the council."
The targeted rate can be "triggered ahead of development occurring", discouraging land banking.
Mr Goff's proposal also includes having every Auckland Council employee earning the Living Wage within three years. The council estimates this will cost $9 million, affecting 2100 staff who'll need raises to meet the target, and another 1200 already earning above the Living Wage, but will also need a raise to keep their wages relatively higher.
He's also proposed setting aside another $500,000 to assist with the city's growing homelessness problem, and putting in a council bid for some of the Government's $1 billion Housing Infrastructure Fund.
Mr Goff's proposal on Monday made no mention of his wish to tax offshore house buyers.
Auckland Council's finance and performance committee will meet on Wednesday to discuss the proposal. Recommendations will be made in mid-December.
The annual budget for the 2017-2018 year will be adopted in June.