New Auckland mayor Phil Goff.

New mayor wants bed tax, fuel tax & new housing tax

Auckland mayor Phil Goff released his budget plan today to restrict rate rises and raise significant new revenue while restraining borrowing and supporting underpaid & vulnerable residents.

His proposal goes to Auckland Council’s finance & performance committee on Wednesday, returns to that committee on Tuesday 13 December and on to the council’s governing body 2 days later for approval to be put out to consultation.

  • I’ll be adding new pages to this story this evening as I read through the proposal, which runs to 68 points & 15 pages.

Mr Goff has proposed restricting rate rises to a 2.5%/year average and introducing:

  • a visitor levy (bed tax)
  • a targeted rate for new largescale housing developments, and
  • a regional fuel tax.

In a release out this afternoon, Mr Goff said: “Ratepayers have shouldered the responsibility for the growth of our city and cannot be expected to continue to do that on their own. This proposal shares that responsibility more fairly across all of those who benefit from living & doing business in our city.”

Mr Goff said his proposal delivered on his campaign commitment to restrict rate rises: “I made a commitment to restrict the annual average rate rise to 2.5%, down from 3.5%, and that is what this proposal delivers.”

The proposal would implement his commitment to a living wage for council employees and contribute an additional $500,000 to co-ordinating work to support homeless Aucklanders: “This proposal puts the people of this city first by taking a responsible & fair approach to tackling Auckland’s growth challenges, and seeking to support those who most need help to live a decent life in our city.”

Mr Goff noted that significant work was underway at the council to find efficiencies across the council group, which includes Auckland Transport, Ateed (Auckland Tourism, Events & Economic Development), Panuku Auckland Development, Regional Facilities Auckland & Watercare Services Ltd.

“We are taking a responsible fiscal approach by ensuring that Auckland Council is more efficient and delivers value for money while finding innovative ways to raise extra revenue to support growth.

“Accommodation providers & other businesses benefit most directly from the funding the council puts into attracting visitors to the city and supporting major events. That is why I am proposing a new visitor levy to be collected by hotels, motels & B&Bs to replace ratepayer spending by Ateed in this area.

“We are also ensuring that we remain well within the council’s debt cap to avoid a potential credit downgrade which would force ratepayers to fund millions of dollars in extra interest costs.”

The mayor has set out a series of recommendations for consultation and promotes these initiatives:

  • Raising up to $30 million from a new visitor levy to replace ratepayer funding currently spent on attracting visitors and supporting major events
  • Introducing a targeted rate for new largescale developments to pay for major new infrastructure, increase Auckland’s housing supply and discourage landbanking
  • Seeking Government support to implement a regional fuel tax to help close the $400 million gap in transport infrastructure funding which the Government & council identified through the Auckland transport alignment project
  • Bidding for a significant share of the Government’s housing infrastructure fund
  • Generating savings from efficiencies across the Auckland Council group
  • Introducing a living wage for council employees, and
  • Contributing $500,000 to co-ordinating work to support homeless Aucklanders.

The uniform annual general charge would rise by 2.5% and the business rates differential, which has been programmed to decline to zero over several years, would remain unchanged from this year’s figure.

The visitor levy (bed tax) has been proposed for Auckland many times and has been fought off by the hospitality sector. Its proponents have regarded it as separate from rates – although that income is what hotels use to pay their rates, in the same way that every other landlord uses rent to pay rates.

“The initiatives that I’m promoting will require collaboration with central government, businesses & our communities. We want to work openly & honestly with all of our partners to make sure that Auckland is one of the world’s best performing cities.

“Given it is only 4 weeks since inauguration, there is still a lot of work to be done. Many of these initiatives will fall under the long-term plan, but it is important to start consulting Aucklanders now.”

Following the December meetings on what should go out to consultation, the council is scheduled to adopt its consultation document & supporting material on 9 February, run the budget consultation through February-March, confirm decisions to be incorporated into the budget on 1 June and adopt the budget on 29 June.

Earlier stories:
22 July 2015: Corrected: Councils want tax reshuffle, innovation a long way off
29 June 2009: ARC overcomes canning of fuel tax, sets 3.9% rate rise
8 October 2008: Penlink gets tick along with electrification, ferries & tickets in first bite of regional fuel tax
13 November 2006: Stadium on the wharf will require a bed of new tax
6 November 2005:
Council looks more closely at bed tax
2 March 2004: Councillors opt for bed tax report
2 March 2004: Christmas present: new tax
2 March 2004: On the road to a supercity
16 August 2002: Councillors opt for bed tax report

Links:
Mayoral proposal for 2018 annual plan pdf
Local authority funding project

Attribution: Mayoral release.

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