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Half of Auckland Council’s regional fuel tax has not been spent

About $156 million from the Auckland regional fuel tax is unspent at a time when Auckland Council is scrambling for money to stimulate the economy and create jobs.

It’s been just over two years since the 11.5 cents per litre tax was introduced and the council has raised $330m from the levy.

It has spent about half of the funds, or $156m, to tackle congestion to date.

The controversial fuel tax was the brainchild of Mayor Phil Goff, who said it would raise $1.5 billion over 10 years and leverage $4.3b for spending on transport with Government subsidies and other funding sources.

Using Goff’s maths, the $330m raised could have leveraged $950m of new transport infrastructure for the city by now. Instead, it has leveraged $500m of infrastructure.

The unspent cash from the fuel tax comes as Auckland Council grapples with a $1 billion hole from the impact of Covid-19 and looks to continue investing in the city’s critical infrastructure needs to lift the economy.

One proposal from Goff is a one-off 5 per cent rate increase next year to help put as much as $500m more into transport projects over the next three years.

The rate rise is contained in Goff’s “mayoral proposal” for a new 10-year budget, which councillors will discuss today before it goes out for public consultation.

Other proposals in the budget are to sell $70m of assets a year for three years and asking Local Boards to sell off old community assets to pay for new ones.

A mayoral spokesman said one reason the fuel tax had not been spent was that it is allocated to major infrastructure projects which take years to plan, design and build.

The fuel tax is ring-fenced for a mix of big and small projects, which include new bus lanes, park and ride stations, road safety and walking and cycling.

The spokesman said another reason spending is lower than forecast is because the Government has taken over some of the big projects to fully fund, including the $1.4b Mill Rd corridor in South Auckland and the $411 million Penlink road between Whangaparaoa Peninsula and SH1. This would free up funds for other projects, he said.

“The projects we are funding through the regional fuel tax are now under way and spending will ramp up as projects move into the construction phase.

“Council is working through reprioritisation and we expect to announce more detail in the coming months,” said the mayoral spokesman.

Council acting chief financial officer Kevin Ramsay said each year a different amount of money will be spent from the fuel tax, depending where things are at with projects.

Planning stages cost less than building, said Ramsay, so early on the council will receive more than it spends.

The unspent money is kept in a reserve to ensure it is spent only on the approved projects, Ramsay said.

Automobile Association infrastructure spokesman Barney Irvine said the fuel tax was sold to the public as being desperately needed to fund a whole lot of urgent projects, so a lot of people will find it pretty hard to accept a big chunk of the money just sitting there unspent.

“Yes, there’s been a lot of change and uncertainty with the transport programme this year, but surely if some of the projects stall, there are piles of other important projects we could move up the list,” he said.

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