Phil Goff could break election promise to hold rates at 2.5 per cent

On the election hustings last year Phil Goff promised to hold rates to 2.5 per cent. Photo / NZ Herald

Auckland Mayor Phil Goff is refusing to rule out breaking a key election promise to keep rates increases to 2.5 per cent or less this term.

Goff prefers to hold rates rises to 2.5 per cent, but faces having no new revenue sources to meet a huge funding hole for transport projects.

He says an agreement with the Government on funding transport requires him to put every option on the table, including using rates.

I have set my objective which is to constrain rates at a low and reasonable level

Phil Goff, Auckland Mayor

At last year's local body elections, Goff promised to keep rate rises to an average of 2.5 per cent or less over three years. He achieved 2.5 per cent in his first budget this year.

Faced with massive population growth, the council being right up against its debt ceiling and a joint council-Government $5.9 billion funding hole in transport over the next decade, Goff is under huge financial constraints heading into a new 10-year budget.

Like his predecessor Len Brown, Goff has been seeking new funding sources to put "more skin in the game", including a regional petrol tax and tolls.

The National Government has ruled out a regional petrol tax and work on tolls or a form of congestion charging is years away. Labour and the Greens have promised to give the council the power to raise a regional petrol tax. A 10 cents a litre tax has been talked about, bringing in about $100 million a year.

Goff said if the Government would not provide a road pricing system, the council faces a massive challenge.

In his first presentation to councillors today on the 10-year budget, Goff said officers should provide advice on general rates increases of between 2.5 per cent and 3.5 per cent, and on the rate increase required to fund critical infrastructure, which could be between 16 per cent and 27 per cent, Goff said.

The last 10-year budget assumed 3.5 per cent rates increases, which have been held at 2.5 per cent for households for the last two years.

Asked if he could tell Aucklanders their rates would not rise by 2.5 per cent over the next two years, Goff said: "The vote on the rate increase is by 21 people, not by one."

"I have set my objective which is to constrain rates at a low and reasonable level," said Goff, who said he told the voters last year his objective was to hold rates at 2.5 per cent but he was one vote of 21.

In his "mayoral intent" for the 10-year budget, Goff said the key focus was to build infrastructure at a rate that matches unprecedented population growth to maintain Auckland's quality of life.

"Auckland grows by 45,000 people a year and is clearly a desirable place to live. This creates opportunities but it also presents challenges in housing shortages and affordability, growing traffic congestion and pressure on our environment.

"The key to tackling these issues is our ability to lift investment in our infrastructure," said Goff.