“Expensive” harbour ferries and cycleways are likely to come under financial scrutiny as an Auckland councillor warns tough decisions will be needed to keep rate rises within the Government’s proposed cap.
Yesterday, Auckland Mayor Wayne Brown revealed a 7.9% rates increase for households – primarily to cover the $235 million annual cost of operating the new City Rail Link – soon after Prime Minister Christopher Luxon announced plans to introduce a 2% to 4% rates cap from January 2027.
Daniel Newman, councillor for Auckland’s Manurewa-Papakura ward, told Herald NOW’s Ryan Bridge that ratepayers will feel the impact of the proposed rates cap most, singling out ferry services across the Waitematā Harbour as a potential council-run asset that will need its operational costs scrutinised.
”I think that there is merit in trying to squeeze the increase down as low as possible. And certainly, I will be one of the councillors who’s looking for the savings that are going to be necessary to ensure that we don’t see a blowout in the cost,” he said.
“But it is getting now to the point where communities are going to feel the savings, in terms of the inconvenience to services that they would otherwise expect.”
Newman singled out Local Government Minister Simon Watts, who announced the proposed rates cap alongside Luxon yesterday, noting he’s the elected representative for the North Shore - home to popular ferry services out of Devonport and Bayswater.
“The ferry services to and from his electorate... are very expensive. Whether we can afford them is a different matter, so let’s have that debate.”
However, he conceded some council decisions in the past should have been struck down.
“Did we need every cycleway that we’ve ever invested in?”
Cameron Bagrie, who advised the Government on the policy proposal, said councils’ current balance sheets “are just not sustainable”.
“Local authority rates are moving up at three times the rates of inflation,” Bagrie told Bridge, claiming his rates had skyrocketed 92% in the past five years.
“It makes absolutely no economic sense as to why revenue for local authorities should be accruing in excess of nominal GDP, or why expenses coming out of local authorities should be rising in excess of nominal GDP.”
Bagrie said the new rules would leave councils only responsible for necessities such as rubbish, but more user-pays components could be added.
“There’s going to be a whole lot of side effects here. There’s going to be pressure on councils for consolidation. There’s going to be pressure on councils to recycle assets.
“They’re going to have to look for savings, and they’ll also look for other revenue means.”
Labour leader Chris Hipkins said he agrees with the rates cap in principle, but questioned how councils would still be able to pay what’s expected of them – their infrastructure, water, roads, parks, pools, libraries and so on – with it in place.
He said the frustration and concern around projects such as Wellington City Council’s $2.3 million “disco toilets” was disproportionate to their cost, as such “frivolous projects” only make up a “tiny proportion” of total council expenditure.
“If you look at where the money’s actually going, it’s going into roads, it’s going into rubbish, it’s going into pipes, it’s going into infrastructure,” Hipkins said.
“Where are the councils going to find that money now?”
Tom Rose is an Auckland-based journalist who covers breaking news, specialising in lifestyle, entertainment and travel. He joined the Herald in 2023.
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