Last week Mayor Phil Goff released his proposal for the Council’s next 10 year budget. This budget, known as the Long-term Plan, is updated every three years and is probably the most important thing the Council does every term. There are quite a few interesting parts of the proposal, although it still lacks a lot of detail that I assume will come through in the next few weeks as this initial proposal is turned into a draft Plan that will be consulted upon next year.

Starting off, the proposal sets three key priority areas.

  • Transport: accelerating investment in our transport network, in particular public and active transport and optimising use of the existing network to address traffic congestion
  • Housing: facilitating a lift in scale and pace of housing construction, through intensified housing and investment in new greenfields infrastructure to help ease the housing shortage and improve housing affordability
  • Environment: dramatically improving water quality at our beaches and streams to stop the degradation of our natural environment and addressing the threat of global warming.

There’s a big boost in overall capital expenditure from the previous 2015-25 Long-term Plan, especially in the transport area:

It’s not exactly clear what this $11-12 billion relates to and whether or not it includes NZTA subisidies. It is also not at all clear what projects make the cut and what don’t, although a table further down provides a few clues in this regard:

The main headlines coming out of the proposal related to a reasonably complex set of new and removed targeted rates, as well as the assumption that funding from a Regional Fuel Tax will be available from July 1st next year, when the next budget takes effect.

Overall the rates increase will be a very small 1.4% for a property at the average value, although this does not count any impact from the Regional Fuel Tax – which will obviously vary significantly depending on how much you drive.

Hopefully some more detail on what’s in and out of the draft transport programme will emerge over the next couple of weeks – even if the programme is quite different to what we might end up with once ATAP is updated and once the new Government released the next GPS, outlining their key transport priorities. For now though, it seems as though we will be able to make progress on some really important transport projects for Auckland, not just light-rail but also a continued major cycling programme, additional electric trains and the ongoing expansion of our rapid transit network.

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  1. Apparently high level discussions with the Government are happening right now but I would not expect much clarity for several months. Because it will take a while to recalibrate the GPS and ATAP away from more and more roads to a more balanced approach there could be a problem in the new year as public consultation has been scheduled to start in February but the new GPS might not be ready until March-April and the ATAP Mark II will have a similar time frame. Internal discussions are underway as to how best to align these processes.

    1. Aren’t these massive timeframes for essentially a mission statement part of the actual problem though? It takes forever to deliver projects that should have been completed already, yet are not even confirmed.

  2. So when the interim transport levy is introduced, council said it’s not a tax rise, as it’s a levy, and it’s interim.

    When it expires the council can’t now turn around and say hey here’s a 4.8% rates cut. (and by the way you still have to pay that, it’s just going to be at the petrol pump instead)

    Looks like Goffs 2.5% election pledge has turned into 6.2% rates rise.

    I’m all for improving our transport system and stopping the dumping of our sewerage into the harbour, but lets be transparent about it.

    1. Yeah well Dan there’s a major difference between rates and a levy on petrol. The petrol levy can be avoided (mostly) if you drive less.

      1. No Harrymc a petrol levy can’t be avoided.

        Petrol taxes filter their way through the economy in the form of food, commodity and good price rises. in fact petrol taxes are practically unavoidable.

        1. Luckily they do so while encouraging less petrol use. Whereas ill-conceived transport infrastructure such as our sprawling road network filters its way through the economy in the form of higher prices due to inaccessibility and congestion, and high rates of externalities payed for by the whole of society, not just the users. It also filters its way through the biosphere, ensuring costs will be borne by many generations to come.

        2. Is the regional tax going to include diesel? Through RUCs or a tax on the fuel? How can RUCs be regional? Wouldn’t it make sense to leave the region to buy them?

    2. It’s not a rates rise though, since it won’t be paid by ratepayers, but by drivers based on how much fuel they use. If you want to minimise your contribution there take a good hard look at how you get around and make some changes.

      Of course, that’s the rub with a pigouvian tax, if you actually need to raise a certain amount of money, you’d better hope that a related amount of people can’t/won’t avoid paying the tax.

      Regarding the percentages, I don’t think you can add up the % change column and get what the rates rise is – that’s the percentage change for that specific line-item, not the percentage change for the entire amount of rates paid. To get that you compare what the rates would be without the transport levy (which “interim” semantics aside would be the rates from the last LTP round minus the transport levy), and look at what they will be now with these other increases in place. I get 1.4%.

      1. Thanks for that, Norma. The question is whether 1.4% is sufficient. For a city with a legacy of ill-conceived transport infrastructure, and underperforming stormwater and wastewater infrastructure, it seems woefully low. But perhaps if there was a radical re-allocation of funds away from the bottomless pit of roads, it would be sufficient?

        1. I don’t have much say on how the food gets delivered to my local supermarket, but I’ll still pay the extra for any increase in fuel costs.

      2. The percentages do add up as they are all based on the 2017/18 rates

        So 2017/18 rates for avg property were $2354

        +2.5% general increase 58.85
        +2.8% water quality increase 65.912
        +0.9% environment levy 21.186

        Comes to a total 2018/19 rates of 2499.948

        And what is 2354 increased by 6.2% (*1.062) = 2499.948

  3. I don’t see a clear accountability between the Regional Petrol Tax and measurable modal shift.

    Mayor Goff and Minister Twyford are going to need very simple and compelling facts and messages to convince people that the current amount of $$pain they get at the petrol station, which will get a whole lot worse with a further tax, is going to have a massive shift into public transport viability for a greater % of the whole Auckland population.

    If the Mayor does not achieve this, ATAP will not work, and Mayor Goff and Minister Twyford will get roasted in the media and highly damaged at their next elections.

    The Mayor cannot simply put out another LTP with a really large and poorly communicated tax inside it.

    1. Why would they do that at all?

      Most of the councils transport liabilities are funding repairs and renewals on local roads. That costs five times more than the regional petrol tax brings in.

      This petrol tax is paying for streets and roads at five times the rate it pays for anything else.

  4. Probably the budget numbers don’t include NZTA subsidy, as the quantum of that is only able to be gauged when NZTA has specifically agreed a project. There will be many transport capital works that are not subsidised by NZTA (the big-ticket items wouldn’t go ahead without subsidy, but smaller projects may be funded 100% by Council). NZTA’s “pot” is of limited size, set by central government and shared out between Councils the country over, without any predetermined geographically-based quota. Theoretically (though it’s extremely unlikely) Auckland could get none of the subsidy – or it could get all of the subsidy, depending on NZTA’s assessment of the merit of Auckland’s proposals compared with those of other parts of the country .

  5. Mayor Goff should not have made that promise of keeping rate rises at 2.5% – even with very low inflation there doesn’t mean that much extra money. Now with the levies etc we pay more and using weasel-words doesn’t please anyone. Whether we should or not is a separate question but we are going to pay more and that needs to be acknowledged.

  6. 1 could we see another attempt to raise parking in Auckland as a means of reducing congestion. Pricing parking so that 15% of Auckland Council controlled spaces are available at any time with the charges being increased for the longer they are used. Could this be considered please?
    2 How soon will we see something concrete on the connection between and the Airport via Punui or at least planning for the Puhinui interchange?
    3 Carbon pricing should start to make a big difference to the fuel use as well so that may reduce the congestion as well as reducint the revenue.
    4 What chance is there of changing our toilet arrangements so that we no longer add 2 gallons of water to half a pint of body waste?
    5 We should also look at removing the electric vehicles form bus lanes now.

    1. Yes, all good points, Ted.

      I’m looking into the toilet arrangements thing at the moment. Composting toilets would be ideal, but even before we go that far, the regulations should at least be changed to allow people to use rainwater for flushing, and for washing machines. This reduces demand of expensive treated drinking water. And in winter, this would allow people in areas where the pipes carry combined sewage and stormwater to reduce the peak load on the sewerage system. Between storm events, use of the tank water for toilets and laundry will create capacity in their tanks, meaning the peak stormwater load in the sewerage system will be reduced, preventing overflow to the harbour.

      What can Council do to require the CCO’s to change the pricing structure to allow this, and what can they do to encourage it, for the sake of our water resources and quality? Dealing with stormwater and wastewater issues together like this is a more sensible approach than supersizing the pipes and treatment facilities.

      1. I didn’t know there were regulations that prevented collected rainwater from being used to flush toilets. I have done this for about 12 years, collecting and filtering rainwater in a tank that is feeding toilet cisterns as well as hose for general garden watering. Hadn’t thought about washing machine but thats a good idea..

        1. I thought you couldn’t because then you couldn’t be charged for the wastewater, which is based on the water usage. But thanks for making me think again. On the Watercare website, it definitely says you can, but it also says you need to apply for consent. I wonder if part of that is that you need to install an extra meter? Anyone applied for consent and know what it entails?

        1. Thanks David, that’s quite useful. Having got my solar sorted recently (yay!) I’m looking forward to getting more organised with water. Until now I’ve just had some of my stormwater feeding garden swales, with a pipe to turn it back to the stormwater network in winter. But I can do better than that. If I recall correctly, Waitakere had quite different rules to Auckland City, so I’ll dig a bit deeper to see what we’ve ended up with now.

        2. Ok, getting off topic but what is the solar you have sorted out? Water heating? Or solar electricity on or off grid using PV panels.
          My home has been off grid since 1999, just now looking at electric car and charging it using my PV system.
          There was a time past when Waitakere council encouraged renewal energy and I have heard 40+ years ago the govt paid a grant towards solar water heating system installation.

        3. We’ve gone for Trina PV panels with Smile brand Lithium Iron Phosphate batteries in a system that works fine if the grid goes down. Solar hot water seems to be going out of favour as PV improves. We’re very happy with set up. Feeding back to the grid, making all our power and hopefully if we get some heat pumps sorted for hot water and space heating, we’ll be close to providing all our own power in winter too.

        4. How much battery capacity did you need to provide your own power for heating in winter evenings? Would have thought that would cost a bomb vs consuming grid power in the evenings.

        5. Sorry only just saw this now. We have 11.4 kW of battery. We haven’t had a winter yet. It won’t be sufficient with our current set up, but we’re going to be using it as an opportunity to analyse our usage more, and try to get as close as possible. Probably we’ll install a ground source heat pump.

          The economic decision was based on

          1/ there being value in the resiliency for the street in an emergency, eg having a frig for medication, and an ability to charge laptops and cellphones
          2/ innovation is only going to bring down the cost of the batteries and improve the technology if people are supporting the industry now, and
          3/ the batteries allow us to use our own power in the evenings throughout the year.

        6. Oh, and there’s another option too. If you have enough panels to provide power for heating in winter, but can’t afford the batteries, I’d look into storage heaters. Let them heat up during the day, then turn them on in the evenings.

  7. Money’s no object for old Pinochio Phil.

    No such thing as cutting council expenditure when you can screw the ratepayers for a few dollars more.

    1. So Vance should the Council do anything about greenhouse gas emissions? And in Auckland the primary source of those emissions is transport generated; so would it not be reasonable for those creating the problem to pay for it; and for those adding to the problem by the greatest amount (those driving the most) to contribute the most.

      I am in favour of an even more aggressive approach.I think that the government should: increase the cost of registering new motor vehicles (more for those of greater cc rating); increase the cost of registering used vehicles; and increasing annual registration costs. However in return all of this money should be returned into public transport subsidies so that people have the option. That option for individuals to use a higher priced private car method of transport; or a much cheaper priced public transport system that will greatly reduce greenhouse emissions, reduce congestion, have a positive impact on the balance of payments, and increase disposable income for those choosing the latter option.

      1. Let’s screw poor South Auckland factory workers over some more.
        Don’t think there’s too much PT available for those working the night shift.

        Greenhouse gas emissions? Oh dear.
        Better tell A Gore to stop gallivanting around the globe in his private jet then.

        Btw. Tell me why our glaciers were still advancing until 2009?

        1. ‘Btw. Tell me why our glaciers were still advancing until 2009?’

          Good cherry picking of evidence. Fox and Franz Josef advanced for a number of years as they are steep glaciers in a high precipitation area, which means they are much more sensitive to short term snowfall rates. Almost every other glacier in NZ was retreating at the time due to the warming climate.

        2. “Don’t think there’s too much PT available for those working the night shift.”

          Well then there is an easy answer, isn’t there. Unless you are concern-trolling.

        3. “Btw. Tell me why our glaciers were still advancing until 2009?”

          Because the two you are talking about are outliers on a global trend line.

  8. I’d question why the budget for Parks and Community is doubling. A large increase in Water is certainly needed to stop sewage discharging onto our beaches every time it rains.
    I worry about the magnitude of my rates increase, as my “valuation” went up quite a lot, although my house somehow halved in value.

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