Auckland has to pay for its growth, it cannot go cap in hand to people in Palmerston North and Wanganui, Housing and Urban Development Minister Phil Twyford said today.

Speaking at the launch of the Herald's annual Project Auckland publication today, the Te Atatu MP said it was not politically sustainable for the Government and Auckland Council to ask people outside Auckland to fund the full costs of the city's growth.

With Auckland growing by the population of Tauranga every three years and in catch-up mode from decades of under-investment in infrastructure, Twyford said the Government would fund its share of Auckland's transport budget and work with Auckland Council to generate new funding sources.

Twyford, who is also Minister of Transport, said the Government was interested in new financing tools, like infrastructure bonds, targeted rates, and capturing the value from new developments.


The Government is also changing the law to allow Auckland Council introduce a regional fuel tax, expected to be 11.5 cents a litre to raise between $130 million and $15m a year.

Asked about the Government's appetite for public-private partnerships (PPPs), Twyford said there were some areas the Labour-led Government would not go, such as prisons, but he said there was a "happy hunting ground" for private capital to contribute to big investments in transport and urban renewal.

"In fact, Government can't do it on its own. The Government can play a co-ordinating and enabling role as we have seen at Hobsonville with the Hobsonville Land Company.

"A smart state will take away some of that risk, invest in the infrastructure laid down and do the master planning and then get out of the way," Twyford said.

One issue the Government does not have a policy on in Auckland, Goff said, was a new stadium in the central city.