New Auckland Mayor Phil Goff has proposed a 2.5 per cent rates rise next year, a living wage for council staff and an extra $500,000 to support homeless people in his first budget.

Goff, who has only been in the job for seven weeks, has also proposed a visitor levy, a targeted rates for new large-scale developments and a regional fuel tax as new funding tools for the cash-strapped council.

"Ratepayers have shouldered the responsibility for the growth of our city and cannot be expected to continue to do that on their own. This proposal shares that responsibility more fairly across all of those who benefit from living and doing business in our city," says Goff.

"I made a commitment to restrict the annual average rate rise to 2.5%, down from 3.5%, and that is what this proposal delivers."

The Mayoral proposal is the forerunner to Auckland Council's Annual Plan process and sets out a series of recommendations that are presented to the public for consultation.


The proposal promotes the following initiatives:

• Raising up to $30 million from a new visitor levy to replace ratepayer funding currently spent on attracting visitors and supporting major events.
• Introducing a targeted rate for new large-scale developments to pay for major new infrastructure, increase Auckland's housing supply and discourage land-banking
• Seeking Government support to implement a regional fuel tax to help close the $400m gap in transport infrastructure funding identified by central government and Auckland Council under the Auckland Transport Alignment Project
• Bidding for a significant share of the Government's Housing Infrastructure Fund
• Generating savings from efficiencies across the Auckland Council group
• Introducing a Living Wage for Council employees
• Contributing $500,000 to coordinating work to support homeless Aucklanders

"The initiatives that I'm promoting will require collaboration with central government, businesses and our communities. We want to work openly and honestly with all of our partners to make sure that Auckland is one of the world's best performing cities.

The mayor's first proposal for consultation will be discussed at Wednesday's finance and peformance committee.

The council's governing body will agree on consultation items for the annual budget on December 15. The budget takes effect in July next year.

Visitor levy: From the Mayoral Proposal for the 2017/18 annual plan:

The number of commercial guest nights in Auckland rose from 6 million in the year ending July 2011 to 7.3 million in the year ending July 2016.

This growth is partly attributable to the visitor attraction and major events activities of Auckland Tourism, Events and Economic Development (ATEED), and has placed additional demands on the city's infrastructure and services. In light of the benefits visitors derive from the council activities, ATEED has been exploring with the commercial accommodation sector the available options for indirectly funding some or all of ATEED's visitor-related expenditure from visitors rather than Auckland ratepayers.

The council cannot set a bed tax, but may be able to achieve a similar outcome through a
targeted rate on accommodation providers which we expect to be passed on to guests
through an additional charge on their bills. The revenue captured through a levy is expected to be $20 - $30 million per annum. Indicative council analysis suggests the levy would translate into a 3-4% surcharge on a typical tariff for a 4-5 star hotel - in the order of $6-10 per night. Municipal charges of this nature are common practice in OECD countries.

Staff will engage with the tourism and accommodation sector on the design of the levy and include their perspectives in a report back to the council in the New Year. In the event the levy is implemented the tourism and accommodation sector will be invited to participate on a governance body that will advise ATEED on the allocation of levy revenues.