Len Brown: Business time for rates, transport

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Transport in the greater metropolitan area, and paying for it, will take two decades to resolve. Photo / Steven McNicholl
Transport in the greater metropolitan area, and paying for it, will take two decades to resolve. Photo / Steven McNicholl

Imminent population milestone accents urgency, says Len Brown, Mayor of Auckland.

Auckland celebrates a major milestone this week - the arrival of our 1.5 millionth citizen.

The arrival gives us the opportunity to consider not just how far we have come but how fast we are growing and what we have to do to accommodate that continuing growth.

One of my staff recently showed me a copy of a newspaper from the early 1960s marking the 500,000th Aucklander. It is compelling reading and many of the issues are the same as they are today - the challenges of making New Zealand's fastest growing and biggest city its most liveable.

We hit the million mark in the mid-1990s and conservative estimates suggest we may be welcoming our two millionth citizen before 2030.

So with that in mind, 2012, to borrow a phrase from the Flight of the Conchords, is business time.

If we thought last year was testing - as we ushered in an entirely new governing structure for Auckland and oversaw the demands of the Rugby World Cup - this year we will be getting down to the business end of the major challenges facing Auckland.

The two most significant, in my view, are finalising and introducing the new Auckland-wide single rating system and developing a strategy around how we can pay for the transport infrastructure Auckland desperately needs.

On the first, the Government requires the Auckland Council to bring in a new rating system this year so that the owner of a $500,000 house in Howick pays the same rates as the owner of a $500,000 house in Takapuna.

That is fair and equitable and although the council's total revenue will increase by just 3.6 per cent, the transition will see some rates rising and others falling by significantly more than that. We have to try to cushion that transition as much as possible.

Once we have established the new rating system, rates will be business as usual - keeping them as low as possible while providing the services and investment Auckland needs.

The second major issue - transport and how to pay for it - is something we will need to work on for the next two decades.

Our transport infrastructure is already under stress. We must begin work on some key projects such as the additional harbour crossing, access to the airport, transport links to South-east Auckland, upgrading arterial roads and busways, investing in walking and cycling, and upgrading our ferry service.

The level of investment needed to cope with Auckland's growth is considerable. The NZ Council for Infrastructure Development estimates that the funding gap/deficit (if we are to meet Auckland's transport needs) is around $5 billion.

Unblocking Auckland's transport system is one of the keys to unlocking New Zealand's economic potential. We need a much more efficient system for businesses to operate effectively.

As a trading nation, transport is our lifeblood. We cannot afford to have our products and workers sitting on blocked roads. A more efficient transport system is crucial if we are to reduce our carbon footprint, and improve the environment.

Our transport system must be integrated. Yes, we need new roads, but we know from past experience that new roads clog up almost as quickly as the bitumen sets. Unless we are investing in alternatives now - in a single transport system, involving trains, buses and ferries with an integrated ticketing system - perish the thought of driving across town in 2030.

The City Rail Link is crucial to this. It will essentially "complete" Auckland's rail network, and effectively double the capacity of the rail network across Auckland. By turning Britomart Terminal into the through station it was designed to be, it will allow more trains to move around the entire network more frequently.

Combined with our new, clean and fast electric train fleet arriving next year, it will mean more trains stopping at your local station or transport interchange, with less time in between services.

Considerable analysis has been done on this link. There is significant public support for it. We know we need to get on and build it but what we do not yet know is how we will pay for it. The cost is significant, and we will need to look at a variety of sources.

So far, the Government has declined to contribute to the project, leaving the council to consider other sources of funding for this and other projects. Rates, obviously, are the principal source of funds for local government and will form part of the solution, but they are a blunt option and we need to always be mindful of issues of affordability. We must investigate new funding avenues. I want to consider a range of solutions.

The important question we must confront is: how do we raise the revenue to service the infrastructure investment Auckland needs? There are specific transport funding tools such as congestion charges, tolls and road user charges. We should also revisit the issue of a regional fuel surcharge. Yes, as the AA tells us, road users already pay for the costs of new roads, but they also stand to benefit considerably from reduced congestion with any shift towards public transport.

Congestion charges - where motorists can be charged for each day they bring a car into the city centre - are another option we should seriously consider. London has used this system for a decade and a number of other major world cities have introduced variations. Not only do they raise revenue but also create a direct incentive to consider public transport options. On the downside, we would need to consider the capital costs associated with installing the equipment needed to monitor, as well as equity issues.

Another option I want to consider is network charges, which could place an Auckland infrastructure levy on car registrations. Such a measure would allow for exclusions - if we decided to exclude, for example, superannuitants.

A further option is to raise the international departure tax at Auckland International Airport, which is very low by international standards.

It's never a good time to raise these issues - but we must face them. We will always have constraints in terms of budgets and pressure on our balance sheets. But if we are to unleash Auckland's potential, we must raise these issues. Buck-passing, as one speaker told the Auckland Unleashed conference last year, just leads to gridlock.

We face a big year. We are consulting Aucklanders extensively on the big issues facing the region. Then it is time to ramp up the work needed to make this the world's most liveable city and plan for our next population milestone - the arrival of our two millionth citizen.

- NZ Herald

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