Bernard Orsman

Bernard Orsman is Super City reporter for the NZ Herald.

Asset sales out of Auckland transport debate

John Key said the discussion document would focus Aucklanders' minds on 'how expensive it will be to fund some of the transport projects'. Photo / Natalie Slade
John Key said the discussion document would focus Aucklanders' minds on 'how expensive it will be to fund some of the transport projects'. Photo / Natalie Slade

Auckland Mayor Len Brown has ruled out calls from the Prime Minister and business groups to consider asset sales to pay for major transport projects.

Mr Brown yesterday came under pressure from John Key, the Auckland Chamber of Commerce and the Road Transport Forum to broaden his list of 13 funding options to include asset sales.

Road Transport Forum chief executive Ken Shirley said Mr Brown and a majority of councillors might ideologically oppose asset sales, but hard decisions and trade-offs were needed.

Mr Key agreed with chamber of commerce chief executive Michael Barnett, who said partial or full asset sales should be part of the debate.

But Mr Brown, a Labour Party member, said Aucklanders had made their views clear on privatising public assets and he was sticking to an election pledge not to sell the family silver.

"It's a red herring anyway, you lose the value of the dividend and even if you sell off the whole port it would only pay for a fraction of the transport development we need."

The council owns a 22.4 per cent share in Auckland Airport, valued at about $734 million, and owns 100 per cent of Ports of Auckland, which was valued at $623 million when the Super City was formed in November 2010.

Mr Brown's release yesterday of 13 options to meet a $10 billion to $15 billion shortfall for transport projects over the next 30 years has drawn a huge response from Aucklanders.

Most of the 100-plus responses to the Herald oppose the options that include tolling new roads, regionwide tolls, tolls on congested roads, a regional fuel tax, higher parking charges and raising rates. Other novel ideas include an increase in income tax and GST for Aucklanders. Many of the options would require Government approval or a law change, including the introduction of a departure tax.

Business generally supports Mr Brown beginning a debate on funding major transport projects, which include the $2.4 billion inner-city rail loop and several roading projects.

Employers and Manufacturers Association chief executive Kim Campbell said Auckland could not continue to hide its head in the sand.

"There is a funding shortfall and the sooner we start to face up to it the sooner we can start paying for it."

New Zealand Council of Infrastructure Development chief executive Stephen Selwood said a funding deficit of at least $10 billion could not be funded by tweaking up council rates, petrol taxes and road user charges. It required acceptance that new approaches were necessary.

Treasury briefing papers to the incoming Government have also recommended a "realistic and confidence-building plan for Auckland transport, including use of network pricing and other demand management tools".

The Treasury called for using fuel taxes and road user charges to accelerate investment in growth-enhancing projects where the benefits exceeded the cost.

Mr Key said the discussion document would focus Aucklanders' minds on "how expensive it will be to fund some of the projects". He said the Government had already spent enormous sums on Auckland and made gains with electrification and the $2 billion Waterview project.

Mr Key said the Government reserved the right to decide if personal taxes and GST were increased and it would be reluctant to put additional costs on homeowners and taxpayers.

Said Mr Brown: "What we are doing is giving Aucklanders the chance to have their say ... and Wellington should let that debate happen."

- NZ Herald

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