Phil Goff announces climate change tax as part of 5.9 per cent rates increase

Author
Bernard Orsman, NZ Herald,
Publish Date
Wed, 1 Dec 2021, 12:28PM
Auckland Mayor Phil Goff presented the mayoral proposal today for his fifth budget. (Photo / File)
Auckland Mayor Phil Goff presented the mayoral proposal today for his fifth budget. (Photo / File)

Phil Goff announces climate change tax as part of 5.9 per cent rates increase

Author
Bernard Orsman, NZ Herald,
Publish Date
Wed, 1 Dec 2021, 12:28PM

Auckland Mayor Phil Goff is proposing a 5.9 per cent rates increase next year, including 2.4 per cent to fund a new tax to reduce carbon emissions.

In his fifth budget since becoming Mayor in 2016, Goff is sticking with a planned 3.5 per cent general rates increase set out in the latest 10-year budget.

Goff said the climate action target rate (CATR) will fund an ambitious $1 billion climate action package by delivering more buses, ferries, cycling and walking and urban tree planting.

The targeted rate will raise about $574 million over 10 years and be leveraged to unlock a further $471m from central government and other sources, he said.

"Auckland Council voted unanimously to declare a Climate Emergency in 2019, and we have already committed an extra $15 million a year to climate action through our Recovery Budget. We're not starting from scratch, but we also know that we are not doing enough.

"A recent progress report on our Climate Action Plan states that Auckland's emissions are not remotely tracking in line with our target to reduce emissions by 50 per cent by 2030," said the mayor.

Today's "mayoral proposal" is the first draft of next year's budget that will go out for public consultation early next year and take effect in July.

Goff said the climate action targeted rate will mean 170,000 more Aucklanders – 10 per cent of the population – not previously well served by public transport would live within 500 metres of a frequent bus route.

"This encouraging a shift to public transport is the most effective way of reducing transport emissions, which make up more than 40 per cent of our city's emissions profile," he said.

The new funding would also provide:

  • $122m to progress decarbonisation of the ferry fleet, which accounts for 21
    per cent of Auckland's emissions from public transport
  • $228m for walking and cycling
  • $13.3m for urban ngahere, māra kai (food gardens) and tiny forests

"The Climate Action Targeted Rate adds weight, meaning and mana to our Climate
Emergency declaration and will guarantee direct and ring-fenced funding to cut our
emissions up until 2032.

"For a person with a median-value home worth $1.18 million, the Climate Action Targeted Rate will represent a contribution of around $1.10 a week.

"While nobody relishes the idea of paying more rates, we've heard clearly from Aucklanders that they want us to do more on climate change and to improve our public transport system. We must be able to say to future generations that we used every tool in the toolbox to tackle the climate crisis," he said.

Since becoming mayor, Goff has introduced targeted rates to improve the city's water quality and the environment. A targeted rate for accommodation providers, known as the bed tax, has been challenged in the courts and the council was on the losing end of a recent Court of Appeal decision.

Goff said he previously signalled 3.5 per cent will maintain the council's current capital investment profile to deliver the critical infrastructure Auckland needs.

"Tough decisions taken in our Emergency and Recovery budgets, including reducing staff numbers, cutting non-essential spending, and imposing a $90m annual savings target on top of the $120m saved in the Emergency Budget have helped shore up our financial position.

"However, the ongoing impact of the pandemic, compounded by rapidly emerging inflation and higher interest rates is putting pressure on our finances. We need to continue our drive for efficiencies and reduced spending to ensure ongoing value for money for ratepayers.

"Cost pressures means that we need to focus in the coming financial year on long-term cost savings to offset cost pressures from inflation and to deal with potential future risks," Goff said.

One of those risks is the $4.4 billion City Rail Link, which project boss Dr Sean Sweeney has warned faces a budget blowout and delays by the "very long shadow Covid-19 continues to cast across our construction sites".

The council and the Government, joint partners in the project, are expected to know shortly how much more the project will cost.