Top guns let fire over increases

By BERNARD ORSMAN and ALAN PERROTT

The Treasurer and the Reserve Bank Governor have warned the Auckland Regional Council and other councils about the economic impacts of big rates rises.

Treasurer Dr Michael Cullen yesterday said the ARC would be "wise" to review the formula used to calculate rates, which has led to a ratepayer revolt and calls for ARC chairwoman Gwen Bull to resign.

The region's longest-serving mayor, Manukau's Sir Barry Curtis, also entered the fray by offering to help the ARC reset a "fair and reasonable" rating system, blaming the rebellion on political inexperience.

Reserve Bank Governor Dr Alan Bollard fired a broadside at councils for raising rates above the rate of inflation for most of the past 10 years, raising household rates by 4.5 per cent this year and increasing annual operational spending over the past four years by more than 4 per cent.

These kind of increases could lead the Reserve Bank to tighten monetary policy, which would damage local communities, Dr Bollard told mayors and councillors at the local government conference in Queenstown. He reminded councils to think of the broader economic implications when putting up rates and other charges.

Of the seven councils in Auckland, only Auckland City has held its overall rates increase to the level of inflation but even then it has hit households with an average 5.4 per cent rise.

The ARC has put rates up by 34 per cent to pay for extra transport services but the way it has calculated rates has given households increases as high as 657 per cent and businesses have seen a decrease.

Dr Cullen acknowledged the ARC had a difficult job choosing a system of direct rating, particularly given the different "bias" used by councils for charging more to business.

"North Shore, I think, has had a nine-to-one load against business on the rates, whereas the ARC doesn't and that, of course, means the business rates are down, personal rates are up," he said.

"I don't think they're going to have to reset the rates. I would think they'd be wise to look perhaps at some form of phasing in ... if that is possible."

Dr Cullen said the Government was looking at reviewing the rates rebate scheme in next year's budget to help those on low incomes, especially the elderly, who were hard hit by big rates increases.

Mrs Bull last night issued a statement saying the ARC would have liked to have phased in the new rating system but legislation restricted what it could do.

"Territorial authorities were not applying our rates in the way they were set in the past, which had to be addressed and has amplified the rating increase for some households. The rating policy needed to be applied evenly across the whole region and whatever we did was going to displease some people," the statement said.

Mrs Bull said she noted Dr Bollard's comments on rates and inflation, saying the ARC would love to keep rates to the rate of inflation. Unfortunately, it had a responsibility for growing a public transport system that had a huge under-investment for 50 years.

"It must be remembered too that the ARC's rates pale into insignificance compared with those of the other local authorities. Our increase translates to two tanks of gas for the year for the average household," Mrs Bull said.

Sir Barry said there was no denying the ARC needed more money for an overhaul of the region's transport.

But he said Manukau had advised the ARC to set rates using a uniform annual general charge and a higher charge for business to take the burden off households.

"The ARC chose not to follow our advice, if they had they wouldn't be dealing with the controversy they have today," Sir Barry said.

Meanwhile, at least eight Auckland MPs will be attending a meeting on Friday organised by North Shore Mayor George Wood to discuss the ARC rating issue. They are Deborah Coddington (Act, list), Judith Collins (National, Clevedon), Ann Hartley (Labour, Northcote), Rodney Hide (Act, list), Dail Jones (NZ First, list), John Key (National, Helensville) and Dr Wayne Mapp (National, North Shore). All Auckland MPs have been invited to the meeting.

Mr Jones, who lives in Browns Bay, said people on the North Shore and Rodney were not getting anything for their increased rates.

" ... The ARC has done little or nothing up until now and suddenly, when it has been required to fulfil its functions, it has been exposed in a very naked way as having nothing to show for its expensive administration," he said.





Protest calendar

Friday: Auckland MPs meeting North Shore mayor and councillors to get support for rates review, 4pm, Bruce Mason Centre, Takapuna.

Saturday: Public meeting organised by Rodney ratepayer groups, 2pm, Orewa Community Hall, Hillary Square, Orewa.

August 8: Public meeting organised by Greypower North Shore, 1pm, North Harbour Netball Centre, Northcote Rd.

August 23 (provisional date): Public protest march up Queen St to Aotea Square, noon.

Wake Up Auckland and Greypower plan public meetings throughout Auckland City and Waiheke Island from August 6 to August 22. For times and place phone 376-6213 or email marney@xtra.co.nz

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