How should we fund our greenfield infrastructure?

Author:
Harshal Chitale
Source:
Auckland Council Chief Economist
Publication date:
2017

The indicative cost of new bulk infrastructure to service greenfield areas is $20 billion over the next 30 years.

Those who benefit most from this new infrastructure should pay for the bulk of it.

If we do not cost-recover from those who benefit, general ratepayers will subsidise greenfield areas and skew development towards them.

The cost of new infrastructure could be passed on to those who benefit via development contributions or targeted rates.

Targeted rates provide greater certainty on timing of funding, spread costs inter-generationally, and incentivise quicker, more affordable development.

Even using targeted rates will require more external financing to overcome council’s borrowing constraints.

Insights. Topical commentary on the Auckland economy

July 2017

Last updated: 2017-08-09