“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?”
Auckland Council group chief financial officer Ross Tucker said the council was looking at the proposed rates cap and its implications for Auckland, however there is no proposal to reduce or stop ferry services at this stage.
“While all public transport services require some level of public subsidy, and ferries do require slightly more subsidy than trains and buses, there are no current plans to change any public transport in response to the proposed rates cap,” he told the Herald.
“At this stage we can’t pre-empt how we will make any required additional savings – that process is to be undertaken through our governing body and future planning processes."
Fullers360, Auckland’s primary ferry operator of Auckland Transport’s ferry fleet, told the Herald its services are critical for connecting the city.
“By utilising our blue highway effectively, we are able to contribute to easing congestion and pressure on roading infrastructure and provide accessibility,” said chief executive Mike Horne.
“Maritime innovations now allow us to invest in clean energy transport solutions such as electric, hybrid-electric and foiling ferries, which ultimately save money in the long-term and are the most viable solution to on-water travel.”
Horne noted Fullers360’s ferry services to Waiheke Island and Rangitoto Island operate independent from local and central government funds “and are therefore not associated with Auckland rates”, meaning those services would not be impacted by council funding decisions.
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 the 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.
“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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