Rates to rise beyond inflation

George Wood

Councils in the Auckland region are looking at rates rises above the inflation level as they juggle demands for better facilities as well as catering for population growth.

Auckland and Manukau City councils could choose to hold their spending from general rates in 2006-07 to yearly inflation of about 3.2 per cent.

Instead they have joined other councils in seeking public approval for extra projects which call for continually higher rates over the next decade.

Auckland City household rates are set to rise by 11 per cent this year. About 5 per cent of this is due to the latest property revaluations which have seen house prices rising faster than commercial property - transferring a larger share of the overall rates income to households.

The flipside is business rates are holding steady or falling.

The council is also putting forward a range of options for up to $4 billion of new projects, which would lead to rates increases of 46 to 65 per cent over the next decade.

"We are trying to strike a balance between the things that need to be done and people's ability to pay their rates," said Auckland City finance chairman Vern Walsh.

The council's responsibility to lead development meant a project like enhancing the CBD waterfront had its place alongside stormwater works needed to cater for growth and stop waterways pollution.

Manukau city plan chairman Bob Wichman said an average 4.9 per cent rise was also proposed by his council though it had the chance to peg it to about 3 per cent. "But we probably could not do anything we needed to."

North Shore City Council proposes the biggest rates rise of the cities at nearly 9 per cent.

Mayor George Wood said rates would rise an average of 7 per cent a year in the 10- year plan to pay for $1.4 billion of infrastructure projects, keep existing services and pay interest and loans.

Councillors' efforts to contain the rates rise put increasing pressure on budgets to meet the level of service the community wanted, said Mr Wood.

Franklin and Rodney Districts, struggling with the strain of servicing growth, are aiming at increases of more than 9 per cent.

In Franklin's case, 0.5 per cent of the rate is due to the council's approval of a $3 million civic centre project.

Rodney council is looking for nearly $10 million extra in rates in 2006-07 which means ratepayers will pay on average an extra 9.2 per cent.

Papakura Mayor John Robertson is seeking support for a "business as usual" budget so the council can continue to give a range of essential services, with emphasis on roading and stormwater works.

Manukau and Waitakere City Councils propose to change the basis of rating for 2006-07 rates from unimproved land value.

Manukau has plumped to join Auckland City in charging on a property's annual rental value while Waitakere suggests going to the capital value system used by the Auckland Regional Council, which charges so many cents in the total value of land, buildings and other improvements.

The councils say such changes will mean sharing the rates burden more fairly.

ARC chairman Mike Lee said his council believed that any more than a proposed average 4.9 per cent rise was "beyond the limits of public acceptance".

Half of the rates would go on public transport but the council could not afford to improve it to the level that Aucklanders were crying out for.


Proposed council rates 2006-07
* Auckland City 4.9 pc- 7.3 pc
* Auckland Regional 4.9 pc
* Franklin 9.5 pc
* Manukau 4.9 pc
* North Shore 8.9 pc
* Papakura 5.9 pc
* Rodney 9.3 pc
* Waitakere 6.58 pc