Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

PM Says Brown’s Rail Link Will Be “Burden On The Ratepayers"

PM Says Early Start To Mayor Len Brown’s Rail Link Will Be “Quite A Big Burden On The Ratepayers”

In a radio interview this morning the Prime Minister said that an early start to the Auckland City Rail Link would lead to “quite a big burden on the ratepayers”.

In answer to a question in Parliament yesterday Transport Minister Gerry Brownlee said the Government would not fund the project until it was obvious that targets for passenger and population growth were enough to justify the $3 billion cost of the project.

Mr Brownlee said it was unlikely those targets would be met to allow a start before 2020

Mayor Len Brown's proposal to the Prime Minister is that the Auckland Council will fund the entire cost of the City Rail Link from 2016 to 2020 when the Government would repay 50% of that cost.

The Council's 10-year Long Term Plan shows that in the 5 years to 2020 the Council plans to spend a total of $2.4 billion, funded 50/50 by the Government and Council.

The Prime Minister, last year, gave conditional agreement to support the project which was then estimated to cost $2.8 billion.

That cost is now likely to be at least $3.2 billion.

The Mayor and Council have assumed that the Government would fund half of the total cost, although the Government has not committed to that level of funding.

However the Mayor has failed, after three years of effort, to find a funding method for the Council's half-share.

The Mayor is asking the Prime Minister to provide a cast-iron guarantee that the Government will pay half the final total in 2020, and, with that guarantee, the Council would fund the entire project between now and 2020'

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

With no funding plan in place the Mayor will need to borrow the full cost with the ratepayers being the ultimate guarantors.

Interest on new borrowings would be funded from rates income with the result that rates would rise considerably, which is the burden the Prime Minister referred to this morning.

By increasing its total borrowings to raise this $2.4 billion the Council will reach its prudential borrowing limits, and probably its prudential interest limits.

The Mayors obsession with the Central Rail Link is leading to a very risky financial future where funding for essential basic services will be squeezed to meet the interest costs of the rocketing debt of the city.

This proposal comes from the Mayor and has not been approved by the Council as a whole, and it is now up to councillors to take control of the situation and bring some clear and sane consideration of this dangerous situation.
ends

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines


Gordon Campbell: On The US Opposition To Mortgage Interest Deductibility For Landlords


Should landlords be able to deduct the interest on the loans they take out to bankroll their property speculation? The US Senate Budget Committee and Bloomberg News don't think this is a good idea, for reasons set out below. Regardless, our coalition government has been burning through a ton of political capital by giving landlords a huge $2.9 billion tax break via interest deductibility, while still preaching the need for austerity to the disabled, and to everyone else...
More


 
 

Government: Concerns Conveyed To China Over Cyber Activity
Foreign Minister Winston Peters has confirmed New Zealand’s concerns about cyber activity have been conveyed directly to the Chinese Government. “The Prime Minister and Minister Collins have expressed concerns today about malicious cyber activity... More

ALSO:


Government: GDP Decline Reinforces Government’s Fiscal Plan

Declining GDP for the December quarter reinforces the importance of restoring fiscal discipline to public spending and driving more economic growth, Finance Minister Nicola Willis says... More

ALSO:


Government: Humanitarian Support For Gaza & West Bank

Winston Peters has announced NZ is providing a further $5M to respond to the extreme humanitarian need in Gaza and the West Bank. “The impact of the Israel-Hamas conflict on civilians is absolutely appalling," he said... More


Government: New High Court Judge Appointed

Judith Collins has announced the appointment of Wellington Barrister Jason Scott McHerron as a High Court Judge. Justice McHerron graduated from the University of Otago with a BA in English Literature in 1994 and an LLB in 1996... More

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels


 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.