New Auckland councillor Bo Burns has raised the thorny issue of flattening the rates system, a change favouring owners of higher-value properties.
Mayor Wayne Brown said it was too early to discuss the issue, but he looked forward to hearing the views of fellow elected members.
Senior councillor Greg Sayers has backed the proposal, placing it on the agenda for a budget committee workshop he chairs on December 3.
After barely getting her feet under the table as a councillor for Howick, Burns issued a social media post two days ago, headed “Let’s Talk Rates – and More Importantly, Let’s Do Something About Them”.
“Over the past few weeks, I’ve had multiple meetings, including a dedicated session with council’s specialist rates team, to dig deep into how our residential and business rates are structured, what levers we actually have, and where the pressure points are,” she said.
It followed her maiden speech, where one of Burns’ key priorities was to review the structure and framework of rates, specifically the uniform annual general charge (UAGC).
“It’s one of the biggest issues raised by Aucklanders to all of us over the recent election campaign. There are levers available to us, so let’s use them, or at least bring them to the table to discuss,” she said in her speech.
The UAGC flattens the rates system by shifting more of the rates burden on to lower-value properties and reducing the share paid by higher-value properties.
In practical terms, it means households in modest homes pay higher rates, while households in more expensive homes pay relatively lower rates.
In her post, Burns noted the UAGC has remained unchanged at $604 since 2012, holding steady at 13.9% of the rates take despite the council being legally permitted to set it as high as 30%.
She said the last meaningful discussion on the UAGC at council was in 2016 – a decade with no real conversation about one of the biggest issues for households and businesses.
Burns has requested a rates review be part of next year’s mayoral budget – a draft of which will be released before Christmas – or included in the 10-year budget the following year.
Burns told the Herald she favoured raising the UAGC.
She said the issue appeared to be gaining traction and would come to the table, with councillors examining the levers and options for a fairer model.
Brown said Burns was new and he was pleased to see her interest in rates, but also wanted to hear from other elected members.
“It is a bit early to be talking about this. It’s a matter for the long-term plan when we get to it,” he said.
Sayers said he would gauge the temperature among councillors on December 3 before placing it in either next year’s budget or, as seems likely, the long-term plan the following year.
“It’s appropriate to have another look at it [UAGC],” said Sayers, whose personal view was to review and increase the UAGC.
Labour councillor Josephine Bartley said she had read the 2016 report, when the council decided not to increase the UAGC partly because of equity concerns, and was worried about the implications for owners of lower-value properties.
She said it would be important to discuss the UAGC at the governing body before any decisions are made.
City Vision councillor Julie Fairey said, politically, she favoured a lower UAGC and that it was timely to consider the issue with solid information and decide whether it should be consulted on.
Fairey said she was not afraid to examine the numbers and test whether the current level remained appropriate.
In theory, the UAGC was the council’s only tool for varying charges according to means, so her instinct was to keep it low, though $604 may not be the right figure.
She noted the UAGC was only one component of rates, which accounted for about 38% of the council’s income, and argued context is crucial to the discussion.
Fairey said she was keen for the council to develop new tools to boost non-rate income and reduce reliance on rates, but said this would require support from the Government.
Deputy Mayor Desley Simpson, who represents the wealthy Ōrākei ward, said the UAGC had not been considered for some time and she would be happy to listen to advice about whether the balance in the rating system is correct to ensure equity between ratepayers.
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