Ratepayers face hikes of 60 per cent

Ratepayers around the country are facing rate hikes of around 60 per cent over the next decade to help fund New Zealand's growing transport needs - with Aucklanders likely to be hit hardest.

The North Shore, Waitakere and Rodney councils are proposing average annual rates increases of around 7 per cent until 2016, while Manukau City Council plans yearly rises of 4.5 per cent and Auckland City 3.1 per cent.

Adding to the rates burden are forecasted Auckland Regional Council rises of 5 per cent a year for the next 10 years - a figure the council claims is "at the limit of public acceptance". Overall this will see current rates rise by about 60 per cent.

The average Auckland rates bill is about $1500 a year.

Funding public transport is a key factor in the rates hikes, with $900 million, or half of the regional council's rate take, allocated to improving roading infrastructure.

But Aucklanders thinking of escaping the city for cheaper provincial rates may be in for a shock.

Whangarei is looking at annual 7 per cent rate rises over the next decade while Hamilton has forecast yearly 4.2 per cent rate rises.

Tauranga ratepayers will be hit hardest this financial year, with a proposed rate rise of 14 per cent followed by annual hikes of 4 per cent.

In Napier the story is much the same, with proposed rates rises of 5.45 per cent this financial year and an average 3 per cent annual rise for the next decade.

Wellington, meanwhile, is looking at rate increases of 4.8 per cent next year followed by annual 3.6 per cent rises.

Regional council levies in the capital are also set to increase by between 3 and 8 per cent over the next decade.

Auckland regional council finance chairwoman Wyn Hoadley defended the rates hikes, saying the most serious issue facing Auckland was traffic issues which "will require substantial capital investment".

Auckland City Council transport committee chairman Richard Simpson agreed.

He said more money was needed to improve the region's poor public transport facilities after years of neglect by local authorities.

However, he said in the longer term the council had to look at new ways of gathering revenue, such as congestion charging, to fund roading needs.

The rises are expected to hit the elderly the hardest - and already there are signs of opposition to the move.

Kohimarama pensioner Adriana Gunder predicted the rate rises would force some of the elderly out of Auckland.

"I find these rate rises forecast absolutely outrageous. People on fixed incomes cannot afford to find another $500 or more a year to pay for rates, what with rising petrol prices and healthcare costs, but that's what they'll be forced to do in a decade."

Gerarda Bossard, 78, of St Heliers was also angry about the plans. She feared she and her husband, Oliver, might not be able to afford to pay their rates on a property that had been home to three generations of their family.

Auckland University senior economics lecturer Dr Susan St John is also concerned about increasing the rating burden - especially on those who could least afford it.

It was unfair, she said, to use ratepayers as the funding base for infrastructure projects such as roading.

"These sorts of increases can be quite devastating, especially when coupled with extra user-pay charges in health and the fact superannuation is now worth less to a married couple than in the 1970s."

She believed it could be time to review how infrastructural projects were funded, looking possibly at other potential revenue sources, such as tourists.