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Auckland Mayor Phil Goff to announce proposed rates rise details today

Auckland Mayor Phil Goff will release the first draft of a new 10-year budget today, which could include a proposed rates rise of more than 3.5 per cent next year and water bills rising by 8 per cent.

This would add about $80 a year to the average water bill of $996.

Last week, Goff told the Herald his preference is to hold rates to his election promise of 3.5 per cent, but the impact of Covid-19, creaking infrastructure and population growth could hamper this.

Earlier this month, Goff said the $450 million hole in this year’s “emergency budget” could continue to hammer the council’s finances by a further $540m over the next three years.

At a series of workshops over the past few weeks, councillors have been presented with a sea of red ink and calls by council officers, Auckland Transport and Watercare for more money to avoid significant asset failure.

The Herald understands Watercare has asked the council to approve $6 billion of extra spending to address rundown water assets over the next decade, paid for through higher water bills.

AT is also short of money to keep public transport assets in reasonable condition and having to put a raft of new projects on the backburner to focus on big committed projects like the $4.4b City Rail Link and $1.6b Eastern Busway.

Last week, Goff polled councillors to read the mood on higher rates, water bills and other funding sources, like a targeted rate for climate change. He has also been pouring over the latest advice from finance officers before finalising today’s proposal.

One issue hampering the council is the decision to breach its debt limit of 270 per cent of debt to revenue to 290 per cent this financial year.

This allowed the council to maintain strong investment in key infrastructure and stimulate jobs, but it has committed to bringing the ratio back to 270 per cent next year to avoid a possible credit rating downgrade and costly interest rate rises.

Last week, Goff said the ceiling would probably remain above 270 per cent “beyond this financial year”.

It is also understood the council’s renewal’s programme is under extreme pressure. Regional and local parks, holiday parks, sports fields, coastal assets like seawalls and cemeteries came under the spotlight in the emergency budget, and will do so again.

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