Rates, fuel tax rises tipped as roads revenue

How to fund a $12b transport funding gap has left Auckland with limited options. Photo / Dean Purcell

Auckland faces tough, early decisions to help fund much-needed transport infrastructure.

Aucklanders face steep fuel tax and rates rises from 2015 unless the council can borrow against government permission to impose new road charges in future years.

That was the stark prospect outlined yesterday by a panel of advisers to Auckland Mayor Len Brown, standing on the precipice of a $12 billion transport funding gap between now and 2041.

The panel warns that without public acceptance of road fees - whether motorway tolls or "congestion charges" on local roads - within the next 12 months, Aucklanders will have to pay an extra 3.5c a litre in fuel taxes as well as a transport-focused rates rise of 0.6 per cent for every year until 2021, on top of increases for inflation.

The 17-member "consensus-building group", ranging from business and union leaders to transport-user groups such as the Automobile Association and Walk Auckland, stopped short of providing Mr Brown with a clear recommendation between two difficult options, after rejecting about 20 others, including assets sales and a regional lottery.

It says that without road charges, an average of $400 million extra will have to be raised for each of 30 years through a combination of higher rates and fuel taxes, tolls on new roads, and more public transport user revenue, although with improved patronage ideally cancelling out a need for higher fares.

The alternative of road charges - if accepted by the Government and Aucklanders through a referendum or more detailed consultations promised by Mr Brown over the next six to 12 months - could raise about $250 million a year, keeping increases from the more traditional revenue sources to about $150 million.

Group chairman Stewart Milne, a former Secretary for Transport, said there was also a strong case for the Government to contribute more money, in addition to $11 billion promised by Prime Minister John Key a fortnight ago for major projects such as the City Rail Link, a tunnelled harbour crossing, and a major package of transport improvements between Onehunga and Botany.

But Mr Milne believed his group had received a clear message from almost 2400 people who responded to an earlier funding report to "just get on with it" and to take what action was needed to get the city moving.

Road-charging won more than 80 per cent support among 1262 people and organisations who indicated a preference for either option, his group's final report revealed yesterday.

Even so, Mr Brown said Aucklanders now needed to be shown a clear road-pricing model with all its benefits and pitfalls to ensure acceptance of a system that was "clearly tenable and sustainable".

Group officials say that could include setting up a cordon on key city arterial routes such as from Pt Chevalier to Orakei via St Lukes Rd through Balmoral, Greenlane and beyond, or charging drivers as they leave motorways to enter the central city.

A "network" toll of $2 suggested earlier has yet to be confirmed as a likely fee.

Mr Brown said he was well aware of the question of whether poorer Aucklanders would be able to afford such charges, but said: "What we have at the moment is not affordable. We have our people, the workers, the people of our city sitting on clogged roads - that situation is untenable, it's costing us hugely."

An AA representative on the panel, Mike Noon, said it was clear that the transport programme had to be funded from "all sorts" of directions. "Putting the price of fuel up any time soon with record prices is pretty damn difficult - New Zealanders are hurting out there."