His plans for a regional fuel tax are dead in the water so a central city congestion tax looks like ultimately being the solution for Auckland's transport funding woes, says mayor Phil Goff.

But that could take years to implement and means the immediate funding gap remains a live issue which needs to be addressed with help from the Government, he says.

Talking to The Economy Hub Goff said he was trying to take the pressure off the rate payer and "bring a greater element of user pays into our funding system".

His first annual budget, which is now out for public consultation, includes plans to target the tourism sector, with higher rates for hotels and accommodation providers.


It will also look to target new residential developments with higher rates to cover the council's infrastructure burden.

But on transport the Government has ruled out changing legislation to allow a regional fuel tax.

"It's disappointing but probably not surprising," Goff says, noting that Steven Joyce was the Minister who removed previous legislation which allowed for regional taxes.

"I've had this discussion with Steven ...I think he's wrong and he thinks I'm wrong. But he's the minister so he gets to make the decision.

"I think where he and I do agree is that a congestion tax ultimately is going to be the solution," Goff says.

"If you look at what Singapore is doing, they're running it off a GPS system so you pay more during hours of peak congestion. It does influence behaviour and does help de-clog the streets."

Joyce had also indicated his preference for tolls on some roads. Goff says he isn't opposed to that solution.

But both would take several years to set up and that was too long for Auckland's immediate transport funding gap, he said.

The Auckland Transport Alignment Project (ATAP) - had suggested that could take 8 to 10 year to put in place.

"We can't wait that long."

ATAP has projected transport spending of $24 billion is needed over 10 years.

Four billion of that is currently unfunded, Goff says.

"Say I have to meet half of that a year - $200 million a year - that together with a normal rate increase would take us up to 16 or 17 per cent. That is not politically viable or equitable."

Borrowing was not an option because Auckland City was already bumping up against debt levels which could cost it its AA credit rating.

"I'm saying to Government that is a hard limitation on what we can borrow .So if you want this growth of Auckland each year - 45,000 extra taxpayers coming in and paying taxes to central Government - you've got to help us with the infrastructure."

Despite a shift in power at the top, from Auckland-based John Key to Southlander Bill English, Goff says he remains optimistic that a collaborative solution would be found.

"I think that Bill English understands we are 35 per cent of population and GDP - we're getting 60 per cent of the country's growth."

It is clear that the electorate won't be forgiving of either side if it lets political squabbling get in the way of solving the problems, he says.

"That's a discussion that's still taking place. I'll be in Wellington in the next fortnight and I'll meet the Minister of Finance and I'll meet the PM."

"I've been on the other side, I know the Minister of Finance has a budget he has to keep to so I'm not being unrealistic. But I am saying it doesn't make sense for New Zealand to be wasting $3 billion a year in Auckland traffic congestion. It frustrating the hell out of his constituents and my constituents and we've got to address this together."

Goff says the budget now out for consultation is an attempt to find a balance in the interim.

"You've got to be restrained in raising revenue... but our needs are very pressing."

The budget has options for rates rises of between 2 and 3.5 per cent.

Goff's preference is for a 2.5 per cent increase.

"That's quarter of what the rate increase was in 2015/16. I've done that deliberately because there needs to be a discipline on council that we watch our expenditure and we make sure we can do more with less."

Goff says he hopes to lead by example taking 3 per cent out of Mayoral office budget - with similar cost savings coming out of the wider council.

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