Auckland has finalised and signed its first-ever city deal with the government, in what leaders have hailed as a “landmark” agreement designed to forge a more mature and productive relationship between the super city and Wellington. Prime Minister Christopher Luxon and Auckland Mayor Wayne Brown signed the formal arrangement on Friday morning, setting out a framework for decades of cooperation on transport, infrastructure, and economic development.
The deal, the first of its kind in New Zealand, formalises a series of high-level commitments and establishes a more structured partnership. It guarantees at least three annual meetings between the prime minister and the mayor, more frequent contact with senior ministers, and appoints a senior official on both sides to ensure promises are delivered upon. The National Party made city and regional deals a key election policy, beginning negotiations with Auckland, Otago, and Western Bay of Plenty in July last year.
Speaking at the signing, both leaders emphasised the deal was a “major win” for Auckland and the country, aimed at moving past the political friction that has sometimes characterised the relationship. Mr Luxon said the nation's "economic engine room" needed to be firing on all cylinders to improve prosperity for all New Zealanders.
“There's been too much short-termism. There's been too much Punch and Judy. Too much parent-child. We've got to move this relationship to the next level,” Mr Luxon told reporters. “Why wouldn't you want to work together and be aligned? And yes, it's going to require some tough conversations. but we're up for that.”
Bed tax kicked for touch again
Despite the collaborative tone, a firm agreement on one of Mayor Brown’s most sought-after tools, a local accommodation levy or “bed tax”, remains elusive. The policy, which would place a charge on short-term accommodation to help fund tourism infrastructure and major events, has been pushed by the mayor for years as a way for the city to benefit from its visitor economy.
The deal makes no immediate commitment, stating only that central government will “explore an accommodation levy policy in 2027”. Prime Minister Christopher Luxon, who entered parliament in 2020 after a high-profile career as CEO of Air New Zealand, said the levy was not a priority for the coalition government this term. However, he confirmed Tourism Minister Louise Upston had begun preliminary work on how such a policy might function in the future.
Mayor Brown remained optimistic, predicting the levy would eventually be implemented. “A bit like the CRL [City Rail Link], it will ultimately happen,” he said, expressing a long-term view that he likened to “Māori and Chinese” perspectives. The mayor suggested the main obstacle was the government’s coalition partner, the ACT party.
We've got minor parties here that have got a lot of weight. Most of them got less votes than I got, so we've got to put it in perspective.
ACT leader David Seymour pushed back against the mayor’s comments, telling RNZ it was a “shame” and that Mr Brown should focus on running the city. Mr Seymour reiterated his party’s opposition to new taxes, advocating instead for the party’s policy of sharing GST revenue from new home builds with local councils. “We don't need more taxes. We need better use of existing money,” he said.
A framework for disagreement
The new agreement establishes a foundation for a closer partnership, but it does not erase existing points of friction between the fiscally-conscious mayor and the government. Mr Brown, an engineer by trade, used the announcement to voice his opposition to some of the government’s “unaffordable” and “ill-thought out” roading projects.
“The government's been doing its best, but Wellington's not good at big projects, because there's not a lot of engineers in Parliament,” Mr Brown said. “We have to bring policy and practicality together, and that's been missing. And that's possibly because they haven s because they haven't listened to us. And I'm hard to ignore.”
Another area of contention is the government’s proposed cap on council rate increases, a policy Mr Brown said the council was not consulted on. “If we'd known it was coming, I'd have pointed out that I didn't think it was a particularly clever thing to do,” he said. Local Government Minister Simon Watts confirmed the government was “absolutely” pushing ahead with the policy but had “agreed to disagree” with Auckland Council on the matter.
Transport and stadium overhauls
A central pillar of the deal is a commitment to establish a coordinated 30-year transport strategy for Auckland. This includes prioritising several major projects in the 2027 Government Policy Statement on Land Transport, such as the North-West Rapid Transit project, a public transport link from Botany to the Airport, Mill Road, and the removal of level crossings on the City Rail Link’s Western Line. The latter has been a key focus for Auckland Transport to improve safety and efficiency on the rail network.
The agreement also includes collaboration on the new Waitematā Harbour crossing, time-of-use road charging, and more efficient network management. Infrastructure Minister Chris Bishop acknowledged the deal had “very limited funding commitments” but stressed the government now formally recognised the council’s transport priority list. The future of Eden Park is also set for a major review. The deal includes a commitment to reassess the national stadium’s ownership and operating model. As part of this, both council and government will contribute $5 million each towards relocating Auckland Cricket to Colin Maiden Park, freeing up Eden Park for other uses. The deal also promises investment in roofing the Auckland Tennis Centre to attract more international events, which complements the city’s broader tourism goals, often a feature in guides to Wellington activities and attractions in New Zealand’s major centres.
Economic and environmental commitments
Beyond transport and stadiums, the deal outlines a joint strategy for developing innovation precincts, focusing on areas like the Fisher and Paykel precinct and the University of Auckland’s MedTech-iQ centre in Newmarket. The aim is to strengthen the city's global trade and investment links.
Environmental initiatives are also included, with both parties agreeing to work together on Predator Free 2050, Pest-Free Auckland, and the Auckland Indigenous Biodiversity Strategy. A key focus will be a joint effort to restore the biodiversity of the Hauraki Gulf.
To help finance major projects, the government will introduce a new “Crown uplift funding tool”. This would allow the Crown to contribute additional funding for high-priority projects where the council raises significant new funds through methods like asset recycling or targeted rates. While details remain to be seen, this funding mechanism signals a path forward for breaking ground on the ambitious projects outlined in the deal.
