KEY POINTS:
Auckland councils need to defer projects, borrow more and set higher user charges to soften the blow of significant rate rises over the next decade, says the inquiry into rates.
The inquiry asked whether Auckland was a "special case" and found Aucklanders paid almost 40 per cent above
the national average in rates. Auckland City's were 70 per cent above the average. The large business community - businesses pay more in rates than households - had a big impact on these figures.
Comparing residential rates across the region proved a difficult exercise with separate water and wastewater charges complicating the picture.
But the inquiry found average residential rates in Auckland City were $2039, North Shore $1824, Manukau $1588 and Waitakere $1405. Residential rates were $1429 in Wellington City and $1254 in Christchurch.
The inquiry panel said the forecast rates increases for the Auckland region were unsustainable and lead to affordability issues for ratepayers.
Rates were forecast to rise 30 per cent (11 per cent in real terms) over nine years from $3730 per rateable property to $4867.
The increase was driven by an $11 billion spending programme on transport, community facilities and land purchases for reserves. Another pressure was the 2011 Rugby World Cup.
The panel said councils may be trying to do too much too soon and not all of it may be needed.
To get round this, the panel suggested councils defer some capital projects, borrow more, spend less on depreciation, hike user charges and and for greater Government investment in water.
Using a proportion of GST to set up a contestable fund to pay for water, supply, wastewater and stormwater is one of the bolder recommendations by the inquiry that the Government has yet to respond to.
Auckland City Mayor Dick Hubbard said it would have been better for the inquiry to recommend abolishing GST on rates, which amounted to a "tax on a tax".
Mr Hubbard, whose council has put up rates 21.3 per cent in the past three year, said the inquiry was good news for Auckland.
"It backs up the policies we've introduced over the past three years, including reducing the uniform annual general charge and using prudent debt as a means of funding major long-term infrastructure projects."
A recommendation to rate Crown properties such as schools, hospitals and universities would mean an extra $20 million a year for the council, which was equivalent to a 5 per cent saving for ratepayers, he said.
Auckland Regional Council chairman Mike Lee said the report required careful consideration and many recommendations required law changes but, overall, would bring relief for long-suffering ratepayers.
Auckland rates reform campaigner David Thornton said the report gave the clear message that councils needed to be more diligent reaching spending decisions and expenditure needed to be critically examined before funds were committed.
