This follows intense lobbying from tourism owners in Auckland who say the tax would be unfair and probably illegal.
Goff is headed for his first major defeat, and it’s over the bed tax
Mayor Phil Goff is likely to lose the vote at council for one of his signature policies: the “bed tax that isn’t a bed tax”, otherwise known as the targeted accommodation rate he wants to charge hotels and motels. It will be embarrassing for him and, far worse, it’ll put a $30 million hole in his budget.
We’ve counted the heads and right now Goff doesn’t have the numbers. It’s the first big test of his programme and he’s very likely to fail. This is no small thing. In six years as mayor, Goff’s predecessor Len Brown lost only one major vote on policy.
And on top of that, there’s a question over whether the proposed rate is even legal. How did this happen?
Phil Goff is a decisive mayor. He makes bold policy decisions and then he makes emphatic speeches about why he’s right. There’s a good side to this: we need a mayor determined to get things done and it’s good that he’s shaking up the established order. Goff quite likes to cut up a bit of rough.
But shaking things up and getting things done aren’t the same thing. Goff might sound big and bold but he’s not shown a lot of skill at persuasion – with other councillors, or with interest groups or citizens.
His big problem is that there isn’t enough money to pay even for the existing work of council, let alone all the new projects it’s keen to undertake. He’s committed to a 2.5 percent ceiling on rates rises, which will not solve the problem. Cuts, and/or new revenue streams, are desperately needed.
Len Brown bankrupted the city with his vanity projects, especially the City Rail Link. To ensure his ‘Think Big” projects lived on after his tenure as mayor he entered legally binding contracts that would prove too costly to cancel. In other words he handed his successor a poisoned chalice.
Brown racked up so much debt Goff cannot fund his own pet projects through more borrowing. The credit card is maxed out. Brown’s vanity projects are experiencing cost blow outs. The present government is not keen to give the mayor the power to raise new taxes. At the same time he is committed to a 2.5% rates rise which is insufficient to meet the needs of current let alone future projects.
Of course Goff does have options. He could find savings. He could decrease the budgets to his CCOs. ATEED, far from requiring more money from a new bed tax could find big savings by cutting its bloated bureaucracy, big salaries, overseas ambassadors, overseas jollies, name change think tanks, and other frills and furbelows that are not core business. The same goes for all CCOs. The same goes for Auckland Council’s own overpaid, under performing bureaucrats.
Goff should stop thinking up more, expensive grandiose projects like the waterfront stadium or moving the port, and concentrate in getting back to basics. Given the recent lesson handed to Council by the flooding following heavy rains it is more imperative than ever for Council to provide core services like adequate drainage and flood control.
If he pursues his bed tax idea he will most likely end up getting fleas.