Auckland City mayor Phil Goff. Photo / Jason Oxenham
Auckland City mayor Phil Goff. Photo / Jason Oxenham
Aucklanders are facing the prospect of a 4.5 per cent rates rise next year.
Mayor Phil Goff is planning a general rates increase of 3.5 per cent, but rising costs for waste management and lowering rates for business could see rates tip the scales at 4.5 per cent for households.
This would take the average household rate to nearly $2800, an increase of $126. On top of this, the average household water bill is $972 a year.
This is because a virtual ban by China on waste recyclables, causing a collapse in prices, is the primary driver for a $9.5 million increase in providing waste management services, which are charged separately to general rates on a cost recovery basis.
In the former Auckland City and Manukau areas, which are moving from a fixed price to charging by volume for refuse and food scraps, households could get a further $14 increase, equivalent to a 0.2 per cent rates rise.
The other factor affecting household rates is a long-term plan to gradually lower the rates burden on businesses matched with a gradual increase in residential rates.
Group Chief Financial Officer Matthew Walker said the potential impact of the reduction in the business differential and changes to the waste market means residential ratepayers will see an increase of 1 per cent on average and business rates will on average be 0.9 per cent lower.
Councillors will vote on Tuesday on whether to proceed with Goff's 3.5 per cent rates increase and business differential, plus officers' recommendations on the waste charges. Following public consultation and debate around the council table, the new rates will come into effect on July 1 next year.
The Herald understands Goff's budget proposal for the 2020-2021 financial year includes initiatives to accelerate the number of electric vehicles in the council's fleet and extending concessions for public transport.
Auckland Mayor Phil Goff wants to accelerate the number of electric vehicles in the council fleet. Photo / Dean Purcell
At the local body elections, Goff promised council will only buy electric or hybrid vehicles from next year at an extra cost of $6 million to $6.5m. The higher costs would be offset by lower running costs, he said.
In a statement, Goff said a 3.5 per cent average general rates increase was signalled, consulted on and adopted last year as part of the 10-year budget.
The budget set rates increases at 2.5 per cent for the 2018 and 2019 financial years, rising to 3.5 per cent from next year.
This has allowed Goff to keep his promise to hold general rates increases to 2.5 per cent in his first term and 3.5 per cent in his second term.
Goff said a 3.5 per cent general rates increase is necessary to ensure council can continue to invest in the infrastructure Auckland needs, saying council will spend a record $26 billion over 10 years.
"It is also necessary to enable maintenance of Auckland's infrastructure, which is now valued at over $53 billion, and to account for asset depreciation over time," he said.
Goff said the reduction in the differential between business and residential rates was determined five years ago to ensure both rates were evidence based and justified.
Finance chairwoman Desley Simpson said $430m in savings over 10 years from a "value for money programme" was unlikely to be used to offset rates rises.
"Currently the thinking is we need every cent of that money to cover the pretty big costs pressures from our capital projects.
"We have the biggest capital investment this region has ever seen. It's exciting, needed and we need to ensure we are financially prudent to deliver that workstream," she said.
