Big issues in Auckland Council's 10-year budget signed off, including rates rise of 2.5 per cent from July

Auckland Mayor Phil Goff has said the budget will get Auckland moving with investment of more than $26 billion over the next 10 years. Photo / File

The Auckland Council has wrapped up a new 10-year budget that includes a regional fuel tax of 11.5 cents a litre and holds rates at 2.5 per cent for the next two years.

Named the "build-it" budget by Mayor Phil Goff, it includes targeted rates for improving water quality and tackling kauri dieback disease and protecting native flora and fauna.

Goff has said the budget will get Auckland moving with investment of more than $26 billion over the next 10 years to reduce transport congestion, unlock housing development, clean up beaches and protect the environment.

"We have done the balancing job of not being tough on ratepayers but doing things to transform and make Auckland a better city," Goff said.

Extreme weather events have led to a proposal to establish a $40 million climate change response fund and $90 million to protect coastal assets.

Goff has responded to lobbying from the likes of Auckland Sport and Recreation to propose a $120 million contestable fund for sports and recreation facilities, and lobbying from the arts fraternity to give the Auckland Art Gallery a further $2m a year after sustained funding cuts.

The budget also includes AirBnB paying a targeted rate for accommodation, which was introduced for hotels, motels and other accommodation providers in July last year.

His budget proposes an average rates increase of 2.5 per cent over the next two years and 3.5 per cent thereafter. New property valuations this year mean by some households will pay more than 2.5 per cent from July, while others will pay less.

Councillor Ross Clow, who is chairing today's finance committee meeting and oversaw the long budget process, said his goal was to make it an "all of Auckland" budget, noting area like Papakura and Manurewa are hurting.

Councillor Penny Hulse said it was nice to say "thank you" to Goff for things like extending the Southern Initiative to improve life skills for young people to West Auckland.

The petrol price rise is due to hit motorists at the pump on July 1.

Legislation allowing the tax is expected to be passed in Parliament in time for the tax to come into effect on July 1.

Auckland drivers face paying 25c a litre more in the next three years as the Government also proposes boosting fuel taxes in 3c to 4c annual hikes.

Goff said the tax was critical to unlock projects to improve transport after years and years of under investment.

"We cannot allow our city to gridlock and that is what we are heading toward," he said.

Goff said the tax would raise $1.5 billion over 10 years but with Government subsidies and development contributions it would raise $4.3 billion.

To raise that money through rates would require a 13 per cent to 14 per cent rates rise.

The regional fuel tax was the fastest, cheapest and best way to raise spending to tackle traffic congestion, said the mayor.

Councillor Chris Darby said the tax would lead to significant benefits across the city and become known in the future as a "shape shifter".

"This regional fuel tax allows us to shift gears in Auckland in a way we have not seen before. Out of planning and into delivery," he said.

The budget comes back to the governing body to be formally ratified and comes into effect on July 1.