Bernard Orsman is Super City reporter for the NZ Herald.

Aucklanders get lowest rates rise under Mayor Len Brown

Len Brown. Photo / Dean Purcell
Len Brown. Photo / Dean Purcell

Len Brown wrapped up his last budget yesterday with a 2.4 per cent rates rise - the lowest increase in his six budgets as Mayor of Auckland.

Household rates will rise by 2.6 per cent in July and business rates will rise by 1.7 per cent under what Mr Brown termed a "steady-as-she-goes budget".

The budget is a strong contrast to last year when a special transport levy introduced at the 11th hour resulted in a 9.9 per cent increase for households.

Mr Brown steps down at October's local body elections after two terms as first mayor of the Super City - his career curtailed by a highly publicised affair at the start of his second term.

While most councillors were happy with the 2.4 per cent increase, there were mixed feelings about using a "rainy day" fund to reduce the risk of a credit-rating downgrade.

Credit rating agencies have warned the council of a rating downgrade if its debt-to-revenue ratio approaches 270 per cent.

To create headroom, council officers recommended drawing down $100 million over each of the next two years from a diversified investment portfolio, currently valued at $335 million, to manage the debt ratios and keep funding capital works.

The ratio currently sits at about 250 per cent and expected to hit 265 per cent in the coming financial year.

A one-notch downgrade would roughly lead to an $11 million rise in interest costs, placing pressure on rates increases.

Councillors voted 16-7 to draw down the fund.

Under Mr Brown's leadership the council's debt has risen from $3.9 billion to $7.5 billion - an issue he acknowledged as a matter of considerable community concern.

Deputy mayor Penny Hulse said Auckland was in an unprecedented growth phase and it was all very well to keep the "treasure trove buried in the garden" but asked how the city would extend the northwest busway and deal with special housing areas.

"Let's be prepared to swop some assets and look at inter-generational equity," she said.

Councillors Mike Lee and Cathy Casey believed drawing down the fund was the start of the sale of council assets, while councillor George Wood was surprised at the speed at which council debt had got into the position of needing help from the fund.

"I would hate to think it could be a fire sale," he said.

In other budget decisions, the uniform general charge, which every ratepayer pays towards council services regardless of property values, was set at $394, and the transport levy was retained at $114 for households and $183 for businesses.

Budget numbers

• 2.4 per cent - overall rates rise
• 2.6 per cent - household rates rise
• 1.7 per cent - business rates rise
• $394 - uniform charges
• $114 - transport levy for households
• $183 - transport levy for business.

- NZ Herald

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