John Roughan: City should pay for its own errors

John Roughan

In a country of four million people there is not much need for more than one government but you'd think Auckland could be doing more for itself. The surrender of its train set this week was pathetic.

The takeover became logical because the body that is supposed to provide a million people with cohesive local government, the Auckland Regional Council, hasn't the gumption to charge its voters for the full cost of its decisions.

It has direct rating power but dares not demand more than half the cost of its desired electrification of a slow, narrow-gauge railway. For the balance it went to Wellington and got the previous Government to give it a tax on petrol sold in the region.

National rightly thinks regional sales taxes are wacko, and doubtless takes the same view of Auckland's public transport plan. In fact, no government has really believed Auckland is suited to a rail-based system. Labour bought into the scheme only to prevent the regional council paying a ridiculous price to Tranz Rail for the Auckland tracks.

That was the beginning of a renationalisation of the entire network more by accident than design. In the end, the Government tried to charge the full cost of maintaining the tracks and a private operator couldn't make the trains pay.

It has been a lesson in the costs to the whole economy of incompetence at lower levels of public administration.

There are related examples nearby. The same regional council's decision to buy all of Auckland's port is the reason it is not now merged with Tauranga's at considerable benefit to the opening of Auckland's waterfront as well as the nation's need of port rationalisation.

The council will use port earnings to pay the running costs of its trains.

The Government's decision to take over the capital cost, financed from a national petrol tax, took the city's transport planners by surprise and this week they didn't know whether to worry.

Regional chairman Mike Lee thought the takeover made sense and the mayor of North Shore issued an odd statement of gratitude to the taxpayers of Gore.

Next day the Auckland councils were concerned that the Government hadn't mentioned paying also for station improvements, transferable tickets and other interminable details. North Shore's panjandrum announced that he had sent Transport Minister Steven Joyce a "please explain".

By then they must have noticed that Monday's announcement made only passing mention of the railway in a set of decisions that put the thrust of public investment back into roads.

As the Prime Minister put it, "the package is about better matching transport funding to the realities of how New Zealanders get around each day, and how our goods are transported".

Some sanity returns.

But there is a bigger issue here than the wisdom of a transport plan that has to reverse the residential patterns of a city to be remotely worthwhile. A city of a million is big enough to pay for its own mistakes, and it is healthy for the national economy that it should.

Elected bodies make better decisions when they have to present their voters with the bill.

Local government tries to avoid this test with the claim that property rates are not an equitable form of taxation. They want alternative sources of revenue, preferably collected for them in Wellington.

There is nothing wrong with taxing property. It is perfectly sensible that residents with a proprietary stake in a locality pay for the infrastructure and services that make their homes liveable, their business viable and the community cohesive.

The non-propertied who live in the community or profit from it, pay their share of rates through rent.

The Treasury would like property taxes to provide a greater share of national revenue. Its briefing paper to the present Government points out that a competitive economy needs to lighten the taxation of mobile forms of wealth such as incomes and profits, and collect more revenue from immobile property and consumption.

Any day now Auckland will get a royal commission blueprint for its better "governance". Those who pressed for this exercise fervently believe the city has been deliberately divided by governments that fear the just claims a united Auckland could make on the national revenue.

It is fiction. You never hear the slightest suspicion of such a plot in Wellington. Auckland's eight rate-collecting councils are not even divided on this urban rail scheme. They all support it, even North Shore and the growing population centres of Rodney that have no tracks.

I hope the royal commission has designed an Auckland government for a purpose somewhat larger than a united lobby in Wellington. The country needs its metropolitan centre to live up to its size, make bold, realistic, responsible decisions, convince its citizens to pay for them and become master of its own destiny.