Brian Rudman: Income ideas? Tell us more

Auckland Mayor Phil Goff. Photo / Nick Reed

New mayor Phil Goff was quick to signal that under his regime, ratepayers were no longer going to be a soft touch. When Brett O'Riley, chief executive of the council's economic development agency, offered "hundreds of thousands" of dollars to prop up a heavyweight boxing match, he was quickly forced to eat his words and withdraw the offer.

And surprise, surprise, the promoters decided they could suddenly carry the risk themselves after all.

Now the mayor's revived the idea of a visitor levy to raise between $20 million-$30 million a year to fund the extra public toilets, Queens Wharf terminal facilities and other tourist industry essentials that ratepayers are currently expected to subsidise.

Goff is also proposing a targeted growth infrastructure rate to force land-bankers in areas of housing growth to help pay for the parks, the wastewater and water networks infrastructure that will be needed to service their area.

As well, he's hoping to revive the regional fuel tax, introduced in the dying stages of the Clark Labour Government, of which the mayor was a senior member, but killed off by John Key when he took office.

Having suffered a run of 10 per cent rate increases in recent years, I for one applaud any efforts to diversify the council's income streams. Could I suggest a few more options for the council's consideration. A "betterment tax" springs to mind.

With the $2.4 billion City Rail Link about to snake its way up under Albert St to Mt Eden, enhancing the value of all the properties in its vicinity, what would be more just than this form of capital gain tax, giving back to the community any uplift in land values that occur as a result of adjacent public infrastructure development? It's not a new idea. Under the 1926 Town Planning Act, New Zealand local authorities could impose a 50 per cent betterment tax. Unfortunately it was repealed in 1953.

In Singapore it's called a Development Charge, and there and in Hong Kong such betterment taxes are the main funding sources for roading and underground rail systems.

Closer to home, Auckland Council officials back in February 2013 proposed taxing what it called "shared land value uplift". It was a way of creaming off some of the unearned profits land owners reap through no effort of their own when rezoning of their land triggers rapid jumps in land value.

It would require a law change which seems to have killed it in 2013, but it's worth a revisit. It's hardly left-wing, just a common sense tool used in like-minded democracies such as Canada, Australia and the United Kingdom. In Vancouver for instance, the local council negotiates for a "community amenity contribution" from the property owners which normally equates to around 70 to 80 per cent of the windfall profit. In that city an added community bonus is that 20 per cent of additional housing allowed as a result of rezoning has to be "affordable".

Finally, if Goff were really brave, he'd don his fireproof overalls and campaign to divert the $100 million that spews out of the Auckland Energy Consumers Trust "lottery" each year. Because of its unique origins, I've argued the money be channelled into a special fund for one-off heirloom projects, rather than be frittered away in the general funds.

Sure, those of us living in the old Auckland Electric Power Board zone would have to forgo our annual $345 hand-out. And the directors, whose main role seems to be to pat themselves on the back and skite about their beneficence at distribution time, will have to give up the $342,500 they share in directors fees.

But my guess is that more than half the current recipients of this annual handout were not customers of the old power board when it was privatised. To me their annual windfall is as unwarranted as the instant capital gain of the rezoned property owner.

By law, the trust's 75.4 per cent share of Vector reverts to Auckland Council in 2073. Let's do it now. Instead of Guy Fawkes, Aucklanders could give ourselves a major present each year accompanied by fireworks and general festivities. A new regional park one year, a fully restored St James Theatre the year after. And there's always that stadium Goff hankers after.