The Nation: Lisa Owen interviews Phil Goff
On The Nation: Lisa Owen interviews Phil
Goff
Headlines:
Auckland
Mayor Phil Goff says there will be a road pricing
announcement from the Government next week, which will be
good news for the city in the medium term. He wouldn’t
give any more details, saying it’s up to the Government to
make the
announcement.
Goff says
the amount of money needed for Auckland infrastructure over
the next decade is likely to be about $7billion, rather than
the $4billion initially included in the Auckland Transport
Alignment Project. He says the difference is down to a big
increase in the number of people moving to the
city.
Goff says he’d
still like to discuss proportional allocation of GST with
central government, so Auckland gets back the GST on its
rates. He says he’s raised it, but hasn’t heard back. ,
which is what you raised before, is that still on the table
with them?
Lisa Owen: Good morning, Mr
Mayor.
Phil Goff: Good
morning, Lisa.
Are you preparing for a legal
battle over this, or do you think they’re just going to
roll over and accept
it?
Look, I’ve had very
clear legal advice. Simpson Grierson, one of our leading law
firms, works with council on it. An expert in the area of
commercial and consumer law, David Goddard QC, one of our
leading QCs. And I believe that we’re on very firm ground.
And let me make one point absolutely clear to the industry.
They say they cannot pass it on. I am absolutely certain
that they can pass it on in the same way that they pass on
any other business cost.
Okay, so you think
you’re in the right, but that’s not what I’m asking.
I’m asking if you’re preparing for it to be tested in
court.
It’s not that I
think that I’m in the right. I’m advised that what we
are doing is consistent with the Fair Trading Act, the
Commerce Act and the Local Government Act. It’s up to the
industry as to whether they now want to spend money on legal
fees and put Auckland ratepayers to the expense of legal
fees. What I say to the industry is this is about a fair
sharing of the burden of promoting their industry, and they
need to think about the community and the community reaction
to this because the community won’t thank them for putting
them to a huge expense to try to avoid any responsibility
for promoting something that benefits
themselves.
So how much have you budgeted for
that potential
expense?
I’ve budgeted
nothing because I’m not assuming at the moment that the
industry will–
That’s not responsible, is
it?
No, no. You don’t
budget for something that’s hypothetical. If the industry
decides to take it to court, then we will fight it. But I
hope they don’t make that decision. And I’ve said to the
industry, look, they’ve been pretty aggressive and
strident about this. I’m happy to sit down with them, as I
have over the last six months, and talk them through, to
work with them to get the scheme as equitable as possible.
But what I am saying to them very clearly – don’t expect
the ratepayer to meet the full burden of promoting your
industry from which you benefit.
Okay. Let’s
talk about some of the other challenges you’re facing.
Paula Bennett actually says that the levy is the wrong
approach. Steven Joyce and the prime minister have said that
Auckland isn’t putting enough money into its own transport
funding. Now, you’re getting about, what, $3 billion in
revenue a year and rising. Have you got your spending
priorities wrong, as they would
suggest?
No. And I’m not
sure that they are all suggesting that. It’s certainly not
what the minister of transport is saying to me nor the prime
minister. And it’s like this. We’ve just passed a budget
– $2 billion in extra infrastructure expenditure, 40% of
that going into transport, but 70% of the increase in
investment in infrastructure going into transport. Now, our
problem, and Bill English knows this well – I’ve had the
discussion with him – and so does Steven Joyce. Our
problem is that we’ve just about reached the limit for our
borrowing. We work under a debt to revenue ratio which says
that we cannot borrow more than 265% of our revenue. We’re
already at about 256%. Why is that? Because we just put $1.7
billion into paying for the city rail link – the only city
in New Zealand that’s paying for its own heavy
rail.
We understand that predicament. But the
thing is Steven Joyce is and did say on this programme that
he thinks you got your priorities wrong and that you should
spend more on transport. So they are saying it. And the
thing is whether you believe it or not, it’s perception,
isn’t it? And if they’re saying you’re not paying
enough, they’re not going to give you any more, are
they?
Look, I guess
there’s a little bit of politics in that. But we’ve had
very good discussions, both with the Prime Minister on
several occasions, the Minister of Transport on many
occasions and the minister of finance. They understand the
situation that Auckland is in. They understand because every
economist advising them will be telling them this – that
the benefits of growth come 10 to 25 years down the track,
but the costs fall now. And they know that Auckland has to
succeed for New Zealand to succeed.
If they
know that, Mr Mayor–
And
if they want our city to be congested, gridlocked and
unaffordable, they will do nothing. I think they know better
than that.
So what are they going to do for
you, then?
Look, we’ve
had discussions, for example, on the housing infrastructure
fund. There’ll be decisions made about that later this
month.
Yes. How much are you punting for?
Because when you came here last time, you said two-thirds of
it should be for Auckland. Are you on track to get
two-thirds?
I was modest if
I asked for two-thirds of it.
So what are you
asking for?
We’ve had a
discussion, and they’re looking separately at Auckland
because they know the constraints that Auckland is facing.
They’ve assured me that the proposal that we’ve put up
can be dealt with by them. They are working professionally
and collaboratively with us on that.
Just to
stop you there, in your terms, have you got a greenlight for
the proposal?
Look, I
won’t know till the government’s made a decision. And
can I pre-empt the government? It’s their decision. But
they know our case.
But you’re feeling
confident?
Well, I’m
confident about this – that they know that we are the one
internationally competitive city that New Zealand has and we
cannot remain internationally competitive if we’re
gridlocked and our gateway from the airport is so congested
that people can’t get in and out of it.
If
you don't get the two-thirds that you identified previously
as saying you should at least get that, would you be
disappointed? If you get anything less than two-thirds?
I'm not going to predict
what the Government's going to do – that's their decision.
I'm not asking you what they're doing—
But I've made it very
clear about why Auckland needs this – because we have run
out of ability to borrow more. We could, of course, put it
on rates, and that would be 20% to 30%. But I don't think
the Minister of Finance is going to say that's a proper way
for Auckland to be dealing with it, either.
You're not going to do that, and you've been
categorical about that, which leaves you with shortfalls in
departments. You've got a $4 billion shortfall for your
transport projects, so over the next decade—?
Yeah, I've got news for
you – it's not 4 billion. It's more likely to be 7
billion, because when we put forward – and we did it
together with Government – the Auckland Transport
Alignment Project—
Okay, so it's worse
than first anticipated?
Yeah. No, let me just
explain it. It was based on a 16,000 rise in population by
Auckland each year. We're now growing by 45,000, so we add
the population the size of the city of Tauranga every three
years. And the Government knows – I've given them all the
figures on that – they know that with that growth, 800
extra cars on the road each week, they've got to work with
us to resolve this problem – for the sake of New Zealand
as well as Auckland.
But the thing is just
because they see and understand that, that's not making them
give you more. And the thing is with the Alignment Project,
by about right now, you guys are supposed to have come up
with an agreement on how you're going to fund it. So have
you reached an agreement?
And the short answer is
that my—
The deadline is nigh.
What I said to the
Government was that we need two things – we need some
degree of revenue sharing. You know, if you go to Australia
and you look at a big – let me finish, please. If you go
to Australia and see a big city like Melbourne, where do
they get their money for infrastructure? The government –
the federal government – puts down to the state government
a share of GST. We need something like that for a city the
size of Auckland in New Zealand.
Have they
agreed to that?
No, no,
but they are still considering that. The second thing we
need is a road-pricing system. Now, next week, you'll hear
an announcement from Government on road pricing. I don't
want to comment on it, because I can't pre-empt the
Government's announcement.
Is it going to be
good news for your city?
It
is. I think it will be good news in the medium-term. But we
need something in the short-term. You know, think about that
$7 billion deficit I mentioned before. We cannot leave it
like we left the City Rail Link. We'll get the City Rail
Link – it'll really help – but it won't help for another
five years, and in the meantime, the city is becoming more
and more gridlocked. We need to bring that expenditure
forward, and that is the case that I'm making, and not just
me, but all of our Auckland councillors are making to the
Government.
No, this is really important. So
a road-pricing announcement – that's going to come next
week. What form is it going to take? And when you say it's
not going to help you in the short-term, how far off is it?
Oh, look, I'm going to
leave it to the Government to make that announcement. And
you'll see my comment in response in due course. It's not my
role to pre-empt it. But we have been having these
discussions, and they're serious
discussions.
So proportional allocation of
GST, which is what you raised before, is that still on the
table with them?
I've
raised it; they haven't responded to it yet. But I've put it
in this way – the Government each year takes $239 million,
which is GST, on our rates bill. So we levy rates to our
constituents, and then the Government adds another 39
million and takes it to itself. 239 million. And I'm saying
that that 239 million would be really helpful to help us
address our infrastructure needs.
So as far
as you're concerned, it's still on the table, it hasn't been
tossed to the side?
It's
a discussion still to have.
Okay. Well, how
would you describe your relationship with the Government?
Because, you know, from the outside, it doesn't look that
friendly.
Oh, no, I
disagree entirely. I believe that it's professional, and I
believe it's amicable. I've worked with all of these
ministers over many, many years. I'm not in a partisan
position now; I'm in a position of being Mayor of Auckland,
advocating for Auckland. I meet on a weekly basis with a
whole range of ministers. The discussions are professional.
I think we are making progress. Bill English was at his
media conference last week, saying, yes, he understood
Auckland's position, he understood that we can't put more on
our balance sheet, and they've got to find other ways of
working with us. And I regard that as real progress.
Before we go, I want to talk to you about
housing. Last time you were here, you said to me – and I'm
quoting you here – "If we don't tackle the housing
unaffordability, the electorate in Auckland will punish both
central government and local government." Well, the average
house price in this part of the world is about a million
bucks, so in your view, does the Government deserve to be
punished now by voters?
Oh, look, I'm not going to
tell the electorate what they should do. I'm not entering
into the electoral fray at the end of this year. It would be
unprofessional for me to do so. What I'm saying to all
political parties is that we cannot continue with a
situation where it is unaffordable for a young family to buy
a home of their own in Auckland. I've just completed work
with a mayoral task force. Within about three weeks, we'll
be announcing the results of that, not only to the public,
but to the Government itself. There are things that we on
Council need to do. There are things that central Government
has to do. This task force is made up of economists, of
developers, of builders. I've brought the whole sector
together. I think its recommendations will be really helpful
to Government, any government, and to us.
We're out of time. We'll leave it there. We
look forward to the road-pricing announcement.
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