Death-wish councillors must find fundraising options that don't involve the easy option of hitting ratepayers
How refreshing it would have been if they'd waited for the rates-blending process to work its way through the system before deciding to stick the vacuum cleaner into our wallets again. Len Brown and the majority of councillors who this week voted to increase rates by 3.5 per cent a year for the next 10 years must have a death wish.
Promising voters that if we continue to vote them back into office, they can guarantee city taxes will be 41 per cent higher by 2024, seems suicidal. Particularly so for a mayor who pledged during his re-election campaign last year to limit annual rates rises to 2.5 per cent.
As for the two unelected Maori Statutory Board representatives, David Taipari and John Tamihere, what mandate do they have to go putting my rates up.
Given that like the College of Cardinals, no one can vote them out of office, they should have respected the democratic process and abstained.
Of course for tens of thousands of us, a 3.5 per cent increase would be a wondrous gift.
For the past three years, our rates have gone up by as much as 10 per cent a year, all part of the process of introducing a standard method of rating in a region once split into eight different local bodies.
Most have been willing to grin and bear it, although when writing out the cheques, I do reflect that all I've seen for an extra 30 per cent is that my berms are no longer cut, and from what I can make out, the unique festival of the inorganic rubbish collection has been canned.
Instead of being able to check out the neighbour's dirty mattresses and rusty barbecues, we'll now have to pay the compulsory $24 inorganic waste "targeted rate" Len is going to sting us. For that, you earn the right to summon a council garbologist to your property once a year to remove unwanted material. No doubt the councillors will be reckoning on many people not doing it.
How refreshing it would have been if they'd waited for the rates-blending process to work its way through the system before deciding to stick the vacuum cleaner into our wallets again.
Would Auckland be any less "liveable" if Mayor Len had cut his wishlist back a little? Or investigated new forms of funding which don't involve the easy option of squeezing the ratepayers harder?
If he's short of ideas, a good place to start would be the latest "issues paper" of the Productivity Commission, "Using Land for Housing".
The commission is inquiring into the supply of land for housing at the behest of the Government. It backgrounds how over the past decade, "housing supply has struggled to keep pace with demand," suggests some solutions and seeks feedback.
While housing and related infrastructure is only one of the issues confronting Auckland councillors, the Productivity Commission does mention some alternative funding tools that might save the ratepayers from yet another turn through Len's wringer. It notes the struggle councils, particularly in high-growth areas, have to fund the large scale infrastructure investments needed to meet the needs of future generations and sustain economic growth. Its interest is when funding shortfalls "are a barrier to the development of land for housing ..."
The report points to a Texas device called Municipal Utility Districts (MUDs), where finance for new municipal services is raised through the public sale of bonds. The MUD can levy taxes on properties to pay back the principal and interest on the bonds.
Another suggestion is a "betterment tax" -- in Singapore where it is widely used, it's called a Development Charge.
It's a sort of capital gains tax, which gives back to the community any uplift in land values that may occur after a public infrastructure investment nearby. It also taxes developers who add value to an existing development.
The commission report suggests "the appreciation of land values following rezoning could also be captured through a betterment tax" and notes, rather wistfully, that under the 1926 Town Planning Act, New Zealand local authorities could impose a 50 per cent betterment tax, but that this was repealed in 1953. What a pity.
We learn that "both Hong Kong and Singapore use betterment taxes as the principal sources of funding for transport infrastructure including their respective metro systems".
Yet all our politicians can come up with is expensive and complicated motorway tolling systems and increased rates from captive property owners.