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Budget 2016 leaves Auckland high and dry

Phil Goff – Downtown Stadium-Phil Goff Web

With Auckland’s housing crisis making headlines and the high levels of frustration with growing traffic congestion in the City, the time was right for the government to respond with some big initiatives in its recent budget.

I had big hopes for the Budget.

Along with the business community and many others in Auckland, I was however left disappointed.

There was nothing in the Budget that will make any real difference to stopping the City’s transport and housing problems getting worse by the day.

Quality spending

It was not that I had unrealistic expectations of the government.

Every year in the 15 years I served as a Cabinet Minister, I participated in the Budget process. I know that you cannot operate on wish lists.

The government has to pay for major programmes. You have to learn to do more with less. The Finance Minister and every other Minister has to exercise fiscal responsibility, balance the books and ensure quality spending.

However, Budgets are also about priorities. They are about dealing with problems that hold back our economic productivity and cause huge public frustration.

On both of these measures, transport and housing ought to have been at the top of the Finance Minister’s priorities.

Missed flight

The Minister knows from what the Productivity Commission and the Council for Infrastructure Development have told him that worsening traffic congestion wastes around $3 billion a year in lost productivity and other costs.

As well, it causes all of us wasted time and frustration.

Last fortnight, for only the second time in over 30 years of catching an early morning flight to Parliament, I missed the plane. A trip that should take half an hour took an hour and 10 minutes because the roads leading on to the motorway at 630 am were gridlocked.

CRL vital

The City Rail Link which will double the number of people who are able to go to work by rail and ease road congestion is still five years off because Government delayed their decision to contribute to it by five years. Building new busways and creating light rail which we need now to ease congestion on the roads are not happening. No finance has been set aside for them.

With the fastest population growth taking place in Auckland for decades, 800 extra people a week are coming into Auckland. There were another 42,000 cars on the road last year. Congestion should not be a surprise.

What surprises is that the City’s population has been allowed to grow without putting housing and transport infrastructure in place to cope with that growth.

Quality declining

People want to come to live in Auckland because of the quality of life here. But with gridlocked streets and unaffordable and insufficient houses, we will quickly lose the quality of life that makes Auckland a great place to be.

There was capital funding in the Budget for roading in Gisborne, Marlborough and Taranaki where population growth is slow or non-existent, but no capital funding for Auckland’s transport.

On the housing front, the Government put money aside to pay for some emergency housing beds that already exist, but there was nothing to tackle the real problems.

The media has been highlighting cases of rampant speculation in Auckland housing. One Beach Haven property went up $175,000 in 10 weeks recently. That is an extra $2300 a day.

That provides a great profit for someone, but at the expense of a family who desperately want to buy their own home.

$17 billion needed

Auckland City needs $17 billion in roading, water and other infrastructure to service new houses needing to be built around the region.

Currently the City has very limited ability to raise that money. Government rules stop it from borrowing the money.

The money cannot come out of rates.

Even if rates were to be massively increased, which they should not be, each 1% rise in rates only raises $14 million.

What we need is long-term low interest Infrastructure Bonds to meet the cost of providing vital services. Servicing interest on that debt will probably need to come out of road charging.

Auckland Council has to do better and allow the City to move up and out to cater for the housing needs of the extra 700,000 people expected in Auckland over the next 30 years. But the government cannot avoid its responsibility.

Only the Central government has the tools necessary to solve the housing crisis, such as addressing speculative pressures and inaugurating a major programme to build affordable houses.

Auckland Council and the government should stop blaming each other and work together to resolve the crisis that is hurting more and more Aucklanders.

Phil Goff is former Foreign Affairs, Trade and Justice Minister and has been Member of Parliament for 35 years. Elected from Mt Roskill, he is today Labour Party’s Spokesperson for Defence and Ethnic Communities. Mr Goff is a Mayoral candidate for Auckland, postal voting for which will be held from September 16 to mid-day on October 8, 2016.

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