Auckland fuel tax out; Goff looks for alternatives

Auckland mayor Phil Goff’s major platform for funding the yearly $400 million shortfall for transport projects has been run off the road.

The government has ruled out a regional fuel tax, Mr Goff’s main hope for bridging the shortfall gap.

Finance Minister Steven Joyce said a regional fuel tax will not be introduced as "they are administratively difficult, prone to leakage and cost-spreading, and blur the accountabilities between central and local government."

Instead, Mr Joyce says the government will explore options with the council such as tolls and congestion pricing. Speaking to NBR after his first formal speech as the finance minister, Mr Joyce says Auckland is running out of room to extend the roading network after current projects are completed.

 The mayor says he is disappointed at the government's decision given the city’s worsening traffic congestion.

However, it should not have come as any surprise to Mr Goff.

When Auckland Council and the government agreed in September on a $24 billion package of transport projects in the next 10 years forming part of an $83 billion spend over the next three decades, Transport Minister Simon Bridges said at the time Mr Goff’s plans to introduce a fuel tax were not the preferred option of the government.

“We have to be careful about imposing new taxes on Aucklanders.”

Mr Bridges said he expected there was more likely to be a congestion tax but government mandarins and council staff had serious work to do on funding and “it is not about plugging the short-term revenue gap but changing the travelling public’s behaviours.”

Mr Goff says while the government has the power to rule out a fuel tax, it has a duty to the people of Auckland to come back to council with alternative solutions. 

“Aucklanders are fed up with sitting in their cars on the motorway for hours at a time. It’s lost time for them and lost productivity for the city,” Mr Goff says.

He says people want the government to work with the council to find an agreed solution. 

“In my view, a regional fuel tax is a fair, effective and efficient way of helping close the current $400 million a year gap in transport funding.”

Mr Joyce says the government will explore options with the Auckland Council such as tolls and congestion pricing.

Speaking to NBR after his first formal speech as the finance minister, Mr Joyce says Auckland is running out of room to extend the roading network after current projects are completed.

Mr Goff says putting the burden of resolving the transport funding deficit on to ratepayers will result in a rates increase of about 16% next year.

“I don’t intend to do that. Ratepayers have been shouldering the burden for too long. 

“We must find new revenue streams to fund our much-needed housing and transport infrastructure rather than continuing to load the cost of growth on ratepayers.”

The Auckland Transport Alignment Project has been a good start in getting the city and government working together, Mr Goff says.

"However, it doesn’t go far enough in solving Auckland’s congestion and already faces a funding gap of $4 billion over 10 years. We need a solution now and can’t afford to wait for another four to six years to deal with this problem.”

Despite the rebuff on major funding plank, Mr Goff says he is committed to working with the government to develop new transport funding measures.

“If it remains adamantly opposed to a regional fuel tax, the government need to urgently come up with another workable and sustainable solution,” he says.

On a separate issue, Mr Goff is to take a more hands-on approach to the $200 million Westgate town centre after the Auditor-General criticised the council's governance and transparency over the project. 

Mr Goff says he is taking the recommendations in the Auditor-General's report seriously and will use his call-in powers to bring the issue up to council's governing body for oversight, rather than have it be heard at a committee level.

Auditor General Lyn Provost says after looking into the governance of the project "the risks involved with this development warrant greater involvement by Auckland Council's governing body.”

She also urged the council to release information on the project, even the legal report from crown solicitors Meredith Connell, on a development Ms Provost says is different from that normally seen between a council and private developer New Zealand Retail Property Group.

Mr Goff says because of commercial sensitivity, the project will be discussed behind closed doors at the government body meeting, but information will be made public afterwards.