ARC told to keep rate rises in check

Auckland Regional Council politicians under Government attack for trying to restrain rates rises were urged by their top adviser yesterday not to throw financial caution to the wind.

Chief executive Peter Winder said compounded annual rates rises of about 5 per cent planned for the next 10 years were "at the edge of acceptability".

Aiming any higher to plug a $710 million public transport funding gap would be politically impossible, he said at a meeting of the Auckland Regional Land Transport Committee.

His advice followed a claim by Finance Minister Michael Cullen that the regional council was setting its sights unrealistically low if it were serious about forming a partnership with the Government to fix Auckland transport.

"I don't think it's realistic," Dr Cullen told reporters at Parliament, confirming the gist of a blunt message he gave the Auckland Mayoral Forum last week in a confidential discussion disclosed by the Herald.

"If Auckland wants to achieve its own stated ambitions around public transport, it can't simply say [to the Government], 'We won't spend any more ourselves, therefore you've got to spend the money'.

"That's not a partnership approach around solving Auckland's transport problems."

But Dr Cullen indicated that the meeting, which Prime Minister Helen Clark also attended, had led to work towards an agreed programme between the parties for finding a way of addressing Auckland's transport needs.

"The Government has got to have some say in what is happening in that respect. We can't have a situation where essentially Auckland decides what it wants and comes to the Government and says, 'You're going to pay for it'."

Dr Cullen, who oversees a Reserve Bank contract to keep average annual inflation between 1 per cent and 3 per cent, acknowledged political pressure facing the regional council after a ratepayers' rebellion in 2003 unseated several members at the next election.

"Obviously the results of the last [local government] elections are a bit of a problem for the current ARC in terms of rating issues, but they can't then be simply shifted to a central Government burden," he said.

His message was in contrast to advice he gave the regional council in 2003 to look for a way of softening an average 34 per cent rates rise for that year by phasing it in.

Helen Clark joined that debate by saying the council's rating methods had set off a "bonfire" and were biased against those on lower incomes.

The man who started the 2003 rebellion, John Drury of the Orewa Ratepayers and Residents Association, yesterday vowed to do battle again if the Government forced ratepayers to carry an even heavier load.

"If the Government wants a massive fight on its hands then this is the best way to go about it, and believe me it could be much bigger than the last one," he said.

Other correspondents to the Herald called on the Government to return more petrol tax to Auckland, and Heart of the City business association chief Alex Swney said the region had "had enough of the tinkering and musings of a small-town provincial bully".

Regional council chairman Mike Lee denied any suggestion that rates rises were being "capped" at 5 per cent, saying their compounding effect meant they would almost double to an annual take of $223 million by 2016.

Mr Winder said the transport component of rates was set to more than double to $122 million by then, from $56.4 million this year.

The council's overall spending on transport this year stood at $133 million after a contribution from finite Auckland Regional Holdings funds, without counting $72 million in former Infrastructure Auckland grants for the likes of stations and ferry terminals.