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Home / Business

<i>Deborah Hill Cone</i>: Rates: Up and up then down the hole

By Deborah Hill Cone
NZ Herald·
4 Jul, 2010 03:45 PM4 mins to read

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Opinion by Deborah Hill ConeLearn more

Distress purchases. Petrol is one. So are tampons and ACC premiums. I think voting for the Super City mayor might be one, too. The resentment comes from being sneakily coerced into a transaction that might be grimly necessary but gives you not a whit of joy.

But the ultimate grudge
buy is your local body rates. What are rates, exactly? Why aren't they just called what they are: tax? And why do we mugginses simply accept the fact that they will rise and rise? And in similar feeble fashion, we never really know what we get for our money.

Our $3 billion that is, the not insubstantial amount that North Island councils will collect for the coming financial year. Of course we also accept that local body tax will just go up and up. Local body rates were set to rise between 2 per cent and 10 per cent as of yesterday.

Experts estimate high-value properties could see their rates go up by 10 per cent to 30 per cent overnight when the new Super City rates structure is introduced. I have never really understood the rationale behind rates being linked to property capital value.

Expensive properties pay more rates. Is it just a socialist redistribution of wealth kind of thing? If so, why not be upfront and say so? It's not as if people who live in "Des Res" suburbs get more services for their higher rates. I have moved up in the world but I still spend my week obsessing about how I am going to fit all my rubbish into my wheelie-bin.

And it isn't really equitable, either. My parents, who are retired and on a fixed income, live in a very modest house but love to garden and pay huge rates because it has a big, beautiful section filled with a profusion of fastidiously tended roses and camellias. I suppose local body politicians would recommend they go and live in one of those "executive kennels" with a hanky-sized patch of grass.

I know there are lots of dry policy reasons for why we need to pay local body taxes. Granted, councils have to undertake life-sapping infrastructure projects which are expensive, such as wastewater reticulation and so on.

But is it so unreasonable of me to want to know how many cents of my rates are going for poo disposal and how many are going for cushy jobs for consultants? Forget the council's sausage rolls for farewell morning teas - you can buy a lot of custard squares for the amount the council spends on external advice. (Which, as of press time, the Auckland City Council was still adding up for me.)

I have to confess that my resentment about rates, oops local body tax, might be somewhat assuaged if there was a spoonful of sugar to help the medicine go down - a bribe that gratuitously appealed to my own tastes and prejudices: public artworks that delight and surprise, for example. I'm afraid rugby "party central" doesn't float my boat.

Maybe the Swiss have the right idea. There you pay onerous tiers of taxes to central government and local government but also to your local "canton" or village. Then you can be sure where the money is going - on planting new flowerbeds or building a giant cuckoo clock or whatever.

I live in Parnell, and we don't have normal street lamps, we have really cool lantern lights. They were paid for by the Parnell Business Association. That's because people want to take the initiative to make things work better or look cool when they see a connection between their effort and the outcome.

In contrast, paying rates feels like just pouring your money down a big drain never to be seen again. I am not convinced the Super City is going to be any different.

dhc@deborahhillcone.com

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Opinion

<i>Bernard Hickey:</i> Rates cut will give little thrust to housing market

10 Jul 04:00 PM
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