Phil Twyford suggests rates hike for property owners near rail, infrastructure projects

  • 04/11/2017

Transport Minister Phil Twyford has floated the idea of targeted rates as a way to pay for major developments in Auckland.

Auckland is facing a $6 billion infrastructure funding hole over the next decade as the Government plans $15b worth of transport projects to deal with increasing congestion issues in the city.

"That's not a fictional hole that's been made up for electioneering purposes - that's an actual $6 billion fiscal hole," Mr Twyford told The Nation on Saturday.

While the previous Government wouldn't agree to allowing a regional fuel tax in Auckland, Mr Twyford last week said Labour would back a levy as a means of plugging the funding gap.

But on Saturday he told The Nation that tax was being thought of as a "short-to-medium-term" measure and other funding sources would be needed in the long run.

"We need to move from a system where the Government writes a cheque every six months or 12 months for infrastructure to a system where there's a pipeline of infrastructure finance available," he said.

Among the options the Government would be looking at was a targeted rate at property owners who benefited from projects.

"When you build new transport infrastructure... it generates massive increases in the value of the property around that infrastructure," he said. "I want to look at ways you can capture some of that value and recycle it back."

Selling assets shouldn't be on the council's agenda, he said.

"I don't believe they should… I want us to be smart about how we raise revenue."

Mr Twyford said he would also shortly be receiving a report about possible road tolling options.

"Our view is the regional fuel tax is a short- to medium-term interim measure. Some kind of road pricing or network charging will come in in the medium-to-long-term, and I think probably in between five to 10 years."

He says it's not just about revenue gathering.

"It may generate some revenue, but the most important thing about road pricing it allows you to do demand management and smooth out some of the congestion peaks… and get much better value out of the transport system."

The Government is also looking at the option of offering "infrastructure bonds" to fund work, but significant work still had to be done on the idea and there was no timeline yet, Mr Twyford said.

NZN / Newshub.