The Tauranga City Council Commission’s focus for the first four months of 2024 is very much on finalising and adopting the 2024-34 Long-term Plan (LTP).
As mentioned in previous columns, a key feature of the draft LTP, from a business perspective, is the proposal to introduce a new industrial rating category. And, from a longer-term perspective, the opportunity for the community to express its views on the SmartTrip variable road pricing concept, as a way of addressing traffic congestion and financing future road network improvements, will also be of significant interest to businesses generally. More on that later.
So far, Tauranga is the only council in the country which has consulted on the road pricing concept, which would likely be very similar to the congestion charging proposed by the Government.
The industrial rate proposal was based on the need to ensure that different categories of ratepayers are contributing fairly to the cost of running the city.
While industry, which is defined by land uses devoted to industrial operations and port, transportation and utility network activities, contributes much to our community, these businesses have a disproportionate impact on our roading network and environment and the LTP consultation process sought feedback on whether they should be paying more than other commercial ratepayers towards the council’s funding requirements.
Just over 65% of some 1200 submissions on this subject supported that perspective, and the proposal that an industrial category should have a rating differential of 2.7 (i.e. industrial ratepayers should pay 2.7 times the residential general rate, calculated on property values), to be phased in over a three-year period. For other commercial ratepayers, that would allow the current 2.1 differential to remain unchanged.
The Commission will be considering all of the submissions on this subject at the LTP deliberations meeting in early-March and while no decisions will be finalised ahead of the adoption of the LTP in late-April, we do have to make a balanced decision based on fairness and the best interests of the city as a whole.
Feedback on the SmartTrip concept was substantially negative, and in any event, would require major legislative change before the idea could be advanced. However, there are some complexities that need to be taken into account in any future thinking about road pricing. These include:
- If we don’t have a circuit-breaker that encourages people to use our roading network differently, the current congestions problems will only get worse. That will likely mean more time sitting in traffic jams, which would obviously have a productivity impact for the commercial sector;
- Road pricing could raise a substantial amount of money to improve the transport network, paid for by all road users (not just Tauranga ratepayers) – funding that rates could never provide;
- And, most importantly, the whole matter may well be taken out of our hands. The National Party’s transport policy is to “introduce congestion charging as a new tool to help reduce travel times in our congested cities”. Coalition partner New Zealand First also wants an inquiry on the use of road user charges instead of fuel excise to increase the efficiency and productivity of the national roading network.
So far, Tauranga is the only council in the country which has consulted on the road pricing concept, which would likely be very similar to the congestion charging proposed by the Government. We therefore have some rich feedback to pass-on to central Government as it considers how best to address traffic congestion, the need to reduce carbon emissions from transport activities and future transport funding for Tauranga and the country as a whole.
As you can see then, we have much to deliberate on this month, and to take into consideration as we develop our final plan for the next 10 years.
