Water rates rise to cost average family $260 extra

Water bills are rising by 9.6 per cent on top of a household rates rise of 13.4 per cent to pour more money into the Auckland City Council's coffers.

The double whammy will cost the average family a further $260 this year on top of other rising household bills, such as power, which have risen 32.4 per cent in the past five years.

The council's water company, Metrowater, has laid much of the blame for the increase at the door of the council and its new, hard-nosed approach of squeezing the business for $280 million in dividends over the next decade. Water bills could have been held to the rate of inflation without this requirement, the company said.

Instead, user charges for water and wastewater are expected to soar by 50 per cent or more over the next years, hitting the poorest hardest.

This is a reversal of the previous policy aimed at keeping water costs down for the most vulnerable.

Metrowater chief executive Jim Bentley said as well as having to swell the council coffers, the company could no longer absorb the impact of increasing costs due to inflation of 13 per cent since 2001 and keep up the necessary investment to continue improving the city's water and wastewater system.

Mr Bentley said Metrowater had been able to hold prices for more than five years because of cost savings and efficiencies. In addition, a 10 per cent prompt payment discount introduced in 2003 meant many customers would still be paying slightly less once the price increase came in on September 1.

He did not mention that since 2001, water and wastewater charges from the region's bulk water company, Watercare, had fallen by 2 per cent and 1.1 per cent respectively.

Metrowater has divided the City Vision-Labour grouping on the council, with leader Dr Bruce Hucker opposing moves by Green Party member Neil Abel to fulfil an election promise to bring wastewater charges back into rates to benefit the poorest ratepayers from regressive user charges.

Mr Abel said increased dividends from Metrowater were a way of avoiding raising rates. General rates would rise by about 30 per cent if wastewater charges were incorporated.

In an opinion piece in the Herald today, Mr Abel says the council is using Metrowater as a cash cow to fund other projects in the city.

"I believe it is dishonest, unfair and needs to be stopped now.

"Water charges should be for water and wastewater services only. They should certainly not be used as a covert way of raising funds for things like fixing the Aotea carpark."


Soaking it up

* Last year: $2256
* This year: $2518
* Increase: $262