Covid 19 coronavirus: Auckland Council bleeding hundreds of millions of dollars, looking at help for struggling ratepayers

Auckland Council is bleeding money from coronavirus. Photo / Herald

Auckland Council is bleeding tens of millions of dollars from the impact of Covid-19 and is drawing up plans to help financially stressed households and businesses pay their rates.

From a strong financial position before the lockdown, the Super City is facing a net revenue loss of between $150 million and $350m over 15 months, according to confidential papers made public by the council.

The papers show the balancing act councillors face between the need to maintain essential services, promote economic growth and escalating financial hardship facing households and business.

After a marathon meeting of the emergency committee on April 16, Mayor Phil Goff and many of his leadership team agreed to consult the public on a 2.5 per cent rates increase alongside the planned increase of 3.5 per cent.

Officials have also been sent away to consider the impacts of a zero rates rise on services, staff numbers, business and the council's treasured AA credit rating which, if breached, could lead to higher interest rates for debt, forecast to hit $9.6 billion by the end of June.

The immediate problem is the last quarterly rates bills, which are due by May 28.

"Meeting this obligation will be a challenge for ratepayers who are already financially stressed and who haven't paid in advance," officers said in a report to the audit and risk committee.

They have proposed giving ratepayers a penalty-free extension until August 31 to pay their last instalment, which will coincide with the first instalment of the new financial year.

Under this proposal between $30m and $125m of the $393m of rates due in the final quarter could be deferred.

The council is developing a number of options to ratepayers having difficulties paying their rates, including a payment plan and the existing rates postponement policy.

Another proposal going out for public consultation is postponing the accommodation provider targeted rates, also known as the "bed tax" for one year in recognition of the devastating blow to hotels and motels from the collapse in tourism.