Transport projects cannot be funded out of rates

Mayor Brown’s biggest challenge is how to fund transport projects without increasing rates.

[Extract from an interview with TVNZ news 11/10/10 - http://tvnz.co.nz/local-elections-2010/brown-confident-10b-transport-plans-3831642 ]

David Thornton, who founded NoMorerates.com doesn't believe Brown can succeed with his promise on transport, and cap rates rises at the same time.

"You can't go borrowing money to pay for big transport infrastructure and then have to pay it back some time, because the only way councils pay back money is from rates, that's the only way they can do it.

"You must find other ways. The rates inquiry of 2007 showed there were other ways of doing it. So the big challenge for Mayor Brown and his council is how do we fund these big projects."

He doesn't think approaching central government is a viable option.

"Because, in the way that councils rely on rates for their income, the government relies on tax for its income.

"So taxpayers would have to pay back the loans that the the government would have to raise to pay for this. So why should the taxpayers in the rest of the country have to subsidise Auckland's transport. There would be a huge outcry against that.

"The Prime Minister has said we may give you some but we are not going to give you all that much... so the big challenge to Len Brown is where do I go for the money."

ENDS

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