Gallows humour flashed yesterday as the Auckland Regional Council approved for public consultation a draft 10-year budget amid uncertainty over the council's future.

A headline saying "The Next 10 Years", which was to have appeared over a list of council projects has been deleted from its Region Wide newsletter being prepared for delivery to 560,000 households, and even a reference to the 2011 Rugby World Cup was queried by one councillor.

"We'll be gone by then - we're out of here," said Judith Bassett, referring to a recommendation by the Royal Commission on Auckland Governance for the establishment of a super city to be run by one organisation with control over six subsidiary councils.

Having obtained agreement for its budget draft from the Auditor-General, the council is proposing an average rates rise of 3.9 per cent for the coming financial year - but at the expense of local control of Auckland's trains and railway stations.

That follows the Government's decision to cancel a regional fuel tax of up to 9.5c a litre by 2011.

The regional tax was to have paid for stations and ferry terminals, and a half-share of the $1 billion-plus rail electrification project.

Although the Government has promised to pay the full electrification bill, while replacing the tax with lesser increases in national fuel excise, the regional council says it had to rewrite its budget to avoid a $202 million shortfall on stations and other public transport projects.

It calculated that the unacceptable alternative would be to add a 15 per cent rates rise to the proposed 3.9 per cent, to provide for loan repayments on the shortfall, including for half-built railway stations.

Despite inclusion in the budget of an "assumption" that KiwiRail would take on all the region's rail-related assets and capital projects on July 1, council chairman Mike Lee was keen at yesterday's budget meeting to emphasise a need for the region to keep working with the Government on electrification.

He will tell ratepayers in his introduction to the budget that regional government "must continue to have meaningful influence on metro rail development so there is cohesion and close alignment with Auckland's development."

"Aucklanders have long wanted better rail, bus and ferry services and a better, more integrated, transferable ticketing system," he says.

"We are determined that Auckland will work with the Government to ensure this progress does not stall."

Although the proposed rates rise is higher than Auckland City's indicated increase of 2 per cent, it is less than 4.95 per cent initially proposed in 10-year financial planning.

It follows a decision by councillors, in consideration of financial pressures facing the region, to decline a 3 per cent pay rise authorised by the Remuneration Authority.

The council intends raising $154.5 million from rates next year, of which almost half - $76.5 million - will be spent on public transport.

The Auckland Regional Holdings nest egg will pay most of the remainder of transport spending of $131.9 million, to be matched by just under $150 million in Government operating subsidies and capital grants.

Mrs Bassett's comment, which drew wry laughter from fellow councillors, was in response to a proposed $10 million contribution to sprucing up Eden Park for the international rugby bonanza.

Some councillors questioned the point of putting the public to the trouble of making submissions on a 10-year plan, when there was no certainty about the future of Auckland local government.

The 10-year budget document will be open for public submissions between April 6 and May 6, and will be available from the end of this week at the council's website on www.arc.govt.nz/plans.