Yesterday was really a day of funding news with the other big talking point being the Council finally adopting the Long Term Plan. The budget agreed yesterday is significant as for transport it represents probably the biggest single shift in funding priorities in many generations. Unimaginable just a few years ago, over half of the council’s transport funding (if you exclude renewals) is going towards public transport combined with around 10% going to walking and cycling – not including projects funded as part of other road projects.

The step change in funding has come about in part due to the transport levy now agreed – $99 for households and $159 for businesses. The impact the levy has is shown below as it enables the Interim Transport Programme.

interim-programme

*some of the figures might have changed slightly from when this table was produced

LTP infographic transport levy

In many ways I think Auckland has not been served well by it’s councils (and governments) who for decades have been too scared to make some tough choices and as such failed to invest enough in transport. The budget passing at 10-9 (two who most likely would have voted for it were away) shows that a large number of councillors wanted to continue this trend.

While I understand that people don’t want to pay more rates, the fact the money is going towards significantly investing in modes that we’ve neglected for decades and that are growing strongly is a positive thing. I suspect that if measured based on a return on investment metric we’d be getting a pretty good deal.

We and future generations should thank the 10 councillors from across the political spectrum who were brave enough to look to the future when making this decision. Those that voted for the budget were:

  • Len Brown
  • Arthur Anae
  • Bill Cashmore
  • Linda Cooper
  • Chris Darby
  • Alf Filipania
  • Mike Lee
  • Calum Penrose
  • Wayne Walker
  • Penny Webster

Of course the Herald ran with the story that many would see rates were going up over $1000. The council clarified that today with the following figures.

LTP 2015-18 rates impact

If there’s one area I think people should be upset it’s that the they have to pay GST on top of the transport levy. With around 454,000 households that’s almost $7 million a year extra going to the governments coffers that could be spent elsewhere. It perhaps wouldn’t be so bad if the government would promise to invest that GST back in to Auckland, that’s potentially a lot more cycleways or bus lanes.

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50 comments

    1. “More than 9000 Auckland houses will see rates rises of more than $1000 this year” …and more than 102,000 Auckland houses will see reduced rates this year.

      It’s shitty reporting, and unhelpful averages.

      1. Amen. It’s pretty much Bernard Orsman’s raison d’étre to stick the boot into Len Brown and any of the other Councillors that agree with him on anything. In that case, 102,000 households getting rates decreases doesn’t suit the barrow Orsman is pushing. If you want objective, thoughtful analysis on a given issue (particularly anything involving Len Brown), the Herald isn’t the place to look.

    2. > The Auckland Ratepayers Alliance labelled the 10 councillors who voted for the plan “the terrible 10”. The alliance wanted to ensure none of those councillors were re-elected next year, spokeswoman Jo Holmes said.

      I label the 10 councillors who voted for the plan the terrific 10, and I will be voting to re-elect my local councillor whom voted for the plan.

  1. Yes it is shitty reporting and really indicates just how completely the NZ Herald has been captured by the shrill and the greedy.

    A little while ago while sorting through the archives of elderly relatives we found some old NZ Heralds from the ’60s. Very amusing: even then transport issues (rail in particular) dominated with certain articles that could be re-printed almost word for word today! What has changed is that the Herald of the ’60s while “very establishment” at least attempted to provide a selection of balanced and independent media viewpoints.

  2. isn’t the 9,9% the increase of revenue for the council because of higher number of ratepayer? So the increase is, say, 3% per head but with more properties it becomes 9.9?

  3. “In many ways I think Auckland has not been served well by it’s councils (and governments) who for decades have been too scared to make some tough choices and as such failed to invest enough in transport. The budget passing at 10-9 (two who most likely would have voted for it were away) shows that a large number of councillors wanted to continue this trend”

    The councillors were voting against an average 9.9% rates rise, not necessarily against the transport levy. There may have been some councillors who voted against the rise who were in favour of the transport levy.

    It is a shame that Len Brown can’t see the unnecessary extravagance of his own council. We don’t yet ethnic advisory panels, rainbow advisory panels and unelected Maori statutory boards. We don’t need salary rises for council CEO’s and senior staff members (we probably don’t need those staff at all but that’s a different story!). We don’t need festivals for every ethnic minority, nor do we need council welfare for private enterprise such as the NRL 9’s. I believe the Transport levy could have been included in an average 2.5% rate rise if the council had refocused on it’s core objectives.

    Had that been the case I don’t believe the budget would have passed by such a narrow margin

    1. Actually yes it was the levy – at least for some of them e.g. Ross Clow and Cathy Casey voted against because the levy was a flat fee and not based on property value.

      Many of the things you mention are outside the councils control e.g. Rate rise looks worse due to it being the last year in transition to a single rating system, something the government required and why some areas are getting rates decreases. Maori Statuory board was created by government as part of amalgamation.

      As for staff, CEO is paid less than previous one was, staff numbers are up but cost less than they did before because there’s less use of contractors. Reducing staff levels doesn’t reduce the work and so it just means it has to be done another (and often more expensive) way.

      1. Yes good point about using less contractors etc. However the whole purpose of the super city was to do away with duplication of jobs so that costs could fall as a result (1 mayor not 7, 1 CEO not 7, less call centres, less management etc) overall should have delivered around a 20% reduction in staff.

        1. Yes, the super-city has been a very expensive luxury with no benefits that I can see for most folks living outside central Auckland. My rates have rocketed up 50% since it was created and are still going up. There’s not a remote sign of any efficiency gain bringing rates down.

          1. Always two sides to the story. I live well out if central auckland and my rates have mostly headed south under Len. I do think he needs a better grip on finance and priorities, but let’s be honest, this levy is only necessary ‘cos central government has its priorities even more off the mark.

          2. David, I really can’t agree. Frankly we’ve only had joined up thinking about the city in general and transport in particular since the amalgamation. If nothing else the supercity killed the vile aberration that was Manukau City Council and its appalling traffic engineer led cluster-fuck of a road orgy. At last we have region-wide thinking instead of patch wars everywhere, although they are still evident in bus operator driven decision making like the New Network pattern for the North Shore. It is improving with time; there is even the possibility that central government may catch up with this century too now that the city itself recognises it…

      2. I don’t know where that 9.9% came from, but from a quick glance at the previous annual plan and take the info from the pie graph in this post the total rates increase including the levy is 6.77%. Who came up with this 9.9%?

        1. That 9.9% was a make-believe story published by NZ Herald…..well make-believe for pretty much all bar 9000 house-holds.
          On ya Herald, never let the facts get in the way of a good ‘ol “shock-jock” style rant aye…….

          1. ‘That 9.9% was a make-believe story published by NZ Herald…..well make-believe for pretty much all bar 9000 house-holds.’
            I’d better correct that – much like NZ Herald corrected their headliner.

            It is an average 9.9% however, using a percentage is a nonsense when one of the fees, $114 transport targeted rate is a flat fee. The 9000 households are those paying over $1000 extra in rates. For fairness it would be interesting to see how much those same 9000 households property value has increased by over the last 12 months.

  4. I filled in their daft consultation thing. I told them I wanted road pricing rather than cost cutting and somehow they used that to justify burning me with yet more rates.

    1. From that Metro link below:

      “The rates rises have three main drivers. One is the rising cost of services. The council is indeed responsible for managing that.

      ——The second is the targeted transport levy. This was not the council’s choice. It wanted a user pays approach, with motorway tolls and/or some other kind of levy on
      ——those who use the roads. But that requires a law change and the government said no.

      So the council had a choice: either scrap its plans for addressing the transport crisis, or load the cost onto rates.

      1. It seemed to me that it was always going to be likely that the government would say no. So perhaps the council could have proposed this scenario and asked ratepayers when it consulted on its LTP. Something like: if the government does not pass legislation to allow for motorway tolls or a regional fuel tax would you like the council to a) set a targeted rate to cover the cost of the transport plan or b) stick with current transport funding levels.
        this perhaps may have made it a bit clearer as to what was likely to happen. I would have voted for a) so I’m not too personally concerned but do feel that many Aucklanders were expecting a more user-pays approach than an increased rates bill.

  5. I seemed to have got a blog site on Facebook today which was the Auckland Ratepayers Association having an impolite rant at Brown. I made a couple of comments and,geez, what a mistake that was! You don’t want to have a differing opinion to that lot. Whale oil might be more tolerant.

  6. I’d like to thank the councillors who had the balls to make the hard choice and to vote yes thereby ensuring many transport projects will go ahead in the next three years.The levy which works out to $2.19 a week is IMHO a small cost week on week compared to what Auckland will gain. To me at that rate there is no excuse for those councillors who voted against and could’ve derailed further development in the city. I’m particularly appalled that candidates like Cathy Casey, Ross Clow, and Christine Fletcher didn’t have the vision to see the value of the levy. Quite frankly they should be ashamed of themselves. We of course all understand that this isn’t perfect but to a large degree that is the government’s doing in not allowing the council a range of options to get funding. The whole reason this irritating vote threatening to derail development in Auckland came about was because of Key and his mates messing with Auckland yet again. Oh, and by the way, Bernard Orsman for useless twat of the year.

    1. I really wish people would stop reducing the rate to its weekly amount. Nobody pays their rates weekly and its just a ploy to belittle the actual amount.

      And as pointed out by Real Matthew it comes on top of the rest of the rates – another $1500 minimum which is made up of some very questionable spending!

  7. I feel we were short changed by consultation not ballot for the introduction of the “Super City” but were very fortunate to have Len Brown as Mayor instead of John Banks. Futher the legislation that Len has worked under was really restricting and he was lumbered with the CCO’s under boards appointed by the Govt. He has been pretty good at picking his battles and handled them pretty well. It was unfortunate that he had trouser problems but then that indicates it is time to replace him with someone of similar fortitude and thinking.

    1. I’d better start buying Metro. Well done Simon in writing this piece in the face of some rather intimidatary response in our fair country.

        1. Hear, hear. Simon Wilson’s article was fantastic. Bernard Orsman’s and Fran O’Sullivan’s were lazy, incorrect and inaccurate rubbish.

        2. It’s just a shame Metro sells bugger all magazines now. The “granny” is still read by around 450,000 in print edition daily…plus then add in online readership.

  8. Why do they need to spend another $100m on renewals for the interim transport program? I wound have thought spending on that would be on an as needed basis.

    1. And if you go around our network, you see a lot of things that should be fixed but aren’t because of cost (though we’re not nearly as bad as some countries like the US).

      And even an “as needed” funding need needs to be estimated and allowed for in a line item. Otherwise you end up with people like Cameron Brewer lambasting you for not keeping in budget, on those days when he’s not lambasting you for raising the budget 😉

      1. I get that you need to. Us get for renewals. I was just surprised we are spending an extra $100m on renewals relative to the basic budget.

          1. Another area we could save bucketloads by firing the contractors, AT must be repairing a road every day of the year. There is no reason we should have private companies doing this, it should be done by AT crews.

  9. The Herald article is confusing me. I thought the rates increases were a flat percentage across all residential dwellings plus a $99 levy. But the Herald says Papakura is only getting a 3.3% increase while Otahuhu is getting a 16.9% increase. How does that work?

    1. There are clearer sources of information than the Herald believe it or not. Todd Niall wrote a much clearer one today.

      Basically the differences come down to relative property valuations. If your property’s price didn’t increase as much as the average then your rates will be lower (though you have to take into account the 3.5% rates increase plus the transport levy). For some this has seen rate decreases as shown in the graph above.

      1. Have properties been revalued? I thought they did that every 3 years, it doesn’t seem like 3 years since the last cv’s came out.

  10. Had a quick scan of the wailing in response on TradeMe forums. Quite depressing reading as you see the same basic misunderstandings repeated over and over. Funny thing is seeing people claiming they will move south; but actually most smaller centres to the south pay more rates for properties with less amenities and a fraction of the capital value.

    The ‘10%’ headline figure sounds bad, but for me (on a property) that has shot up over $500k since purchase, rates will rise about $240 per year.. about $5 a week for improved transport is a bargin I for one am very happy to pay.

    I always want the council to be efficient and use the money wisely, but we have been underfunding key areas for many years. If only there was an option to pay another $1 and get the Skypath bundled in…

  11. Its things like the rail electrification here that piss me off. Auckland had a way of paying for it, fuel levy’s, but National killed it dead and then “loaned” Auckland the money with interest. Central governments intransigence and their ruling arrogance means we have conflicting transport polices that is costing Aucklander’s dearly.

    And a simple to understand message to AC, we are NOT bottomless pits of money!. Oh and Cameron Brewers faux concerns for the good people of Otahuhu really made me laugh! What a transparently obvious self server he is.

    1. Ah, but that plan hindered road use while promoting rail; completely impermissible….
      The government needs to wake up and stand on Symonds St for one morning: buses nose to tail and jam-packed all the way along. Auckland Council should pull back on things like, say, celebratory parties over releasing a new plan which will price many out of their homes, as ratepayers are not an endless it of cash. However, really a lot must lie with government policy: they need to acknowledge that leaving all the burden of restructuring the neglected largest city on the ratepayers is only going to lead to stagnation. The people cannot afford it, the city cannot afford it, yet nor can it afford to go on as it is. The government needs to get out of their ideology, focus on what the country needs, and push it through. And given roads and rate increases are leading nowhere, let Auckland charge on a user-basis, make public transport more attractive and allow it to grow. Plus front up the cash for infrastructure before it is needed, rather than analyse the immediate financial gains vs losses after it is needed.
      They parade central government surplus targets, but what good is a central government surplus when the cities are going bankrupt?

  12. I have a friend with a terrace house holiday property in Wanaka; rates are way above what he pays for a much more valuable and better served property in Ponsonby. It’s just simple maths; small population servicing basic amenity costs a hell of a lot per ratepayer.

    The whole debate has so much unreality.

  13. Has anyone ever seen GBH? I look at what happens with the council and the government and increasingly my thoughts turn to GBH. It’s really rather disturbing bearing in mind GBH’s plot…

    That mentioned Metro article in particular reminded me of GBH.

  14. I’m very glad to see that the council is putting extra funding into PT and active transport for the next three years. However, they could have handled the process much better. The $99 levy was pretty much snuck in at the last minute. And it was advertised as $99 rather than the $115 which is what it will be viewed as by most of the people paying it. That’s a bit below the belt, given that the council usually has the good habit of showing charges on a GST-inclusive basis. Matt, I guess the point you’re trying to make in your last paragraph is that it’s unfair the government blocked attempts at finding other ways to fund the programme (road pricing, fuel tax) and also hasn’t come to the party with their own funding. I’d agree with that, and based on that yes it is unfair that they still end up collecting GST revenue. But I don’t agree with people seeing GST on rates as a “tax on a tax” and unfair (see http://greaterakl.wpengine.com/2013/12/05/aa-need-to-rethink-gst-proposal/).

  15. I’m not against the Council spending this much money – I’m not going to whine about my rates bill.

    And it’s probably rich of me to comment on “Transportblog” of all places!

    But I seriously, seriously doubt there has been sufficient analysis of what the optimal split of council expenditure is – does transport really deserve the lion’s share every time? Could the money create more utility by creating better libraries, community halls, and parks (I don’t know, but I also doubt the council knows either).

    1. The reason there is huge expenditure on transport every time is the simple fact the issue has never been tackled properly. Successive councils and governments have been happy to flog off transport and other long-term infrastructure for the sake of cheaper, short-term solutions where the operating costs are less immediately visible to them as the “operator” (ie, roads, and many of them). This results in a continued cycle of “roads are full, more roads needed” band-aids, which steadily grow in cost as the problem worsens. This results in a heap of major short-term spending which keeps growing, and limiting money available for long-term growth, which needs to be spent.
      If the government could allow Auckland to spend on proper infrastructure for once (and even better, offered a hand), then maybe we could see the transport share drop. Should have happened long ago, but short-term, three-year thinking always wins

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