John Key rejects Phil Goff's idea of a house tax on foreigners

Phil Goff swipes into the Auckland Council building on his first day of work today. Photo / Nick Reed

New Auckland Mayor Phil Goff's ideas on housing affordability and tackling traffic congestion have copped a cool response from Prime Minister John Key.

Goff has called for a 15 per cent tax on foreigners buying existing houses (new houses would be exempt) and a regional petrol tax to fill a funding hole to pay for transport and other infrastructure needs.

But on Goff's first day at work today, Key said the best thing the mayor could do to deliver affordable homes was to streamline council's planning and consenting departments to deliver faster consents.

"That will have a far bigger effect than worrying about some tax that a tiny proportion will pay," Key said.

He said if the concept of a housing tax, or stamp duty, was to try and dampen demand, then information at the moment would indicate it would not achieve a lot because not many buyers fit the category.

The Prime Minister also said the Government is not considering a pitch by Goff for a regional petrol tax at the moment, saying it got rid of a regional petrol tax for Auckland when it came to office.

Key said there had not been a change in that position, but said there "will be ongoing discussions I'm sure".

Last night, Goff was encouraged by Key's comments on a regional petrol tax.

"Theyhave a position at the moment, but they are prepared to discuss that and I welcome that."

Goff said if Key was not keen on a tax "then his view prevails", but the response he had received from Aucklanders was overwhelmingly in favour of a tax to discourage foreign investors in the New Zealand housing market.

Goff started work where he means to go on - saying the mayoral office will be the first body to save money.

One of the first things he will do is use an existing council Nissan Leaf electric car as the mayoral vehicle as opposed to the gas guzzling Holden Calais V6 favoured by former Mayor Len Brown.

Goff promised to save "at least 3 per cent" from the mayoral budget of about $4 million.

Goff reiterated that trust and confidence of Aucklanders in council is critical and needs to be restored.

He was referring to a council survey showing just 15 per cent of Aucklanders have trust and confidence and a 17 per cent satisfaction rating. Goff has called this "deeply corrosive" to the system of local democracy.

"One of my first jobs is going to be putting together a budget and that budget has to carry through my commitments in terms of capping rate increases at an average of 2.5 per cent and finding efficiencies," Goff said.