Auckland rates bills sure to rise and rise

[muppet]

Auckland rates bills sure to rise and rise

Tuesday July 11, 2006
By Bernard Orsman

Auckland households, reeling from the latest round of hefty rates rises, can expect their rates and water bills to keep nudging ahead of inflation for the next 10 years towards $4000.

The coming decade is shaping up as a costly exercise as Auckland councils seek to deal with the issues of growth, years of under-investment in infrastructure and capitalising on the region's natural beauty to become a world-class city.

Local Government New Zealand figures show the average household rates bill of between $1800 and $2700 across the region this year is set to rise to between $2700 and $4500 by 2016.

Once the rise in household incomes is factored in, the proportion of the family budget going on rates is expected to increase from about 4 per cent to about 5 per cent over the decade. This is a rise of 25 per cent.

Auckland City bills will climb on average by 54 per cent over the decade. If inflation averages 2.5 per cent for the next 10 years, that would add up to 28 per cent over the decade.

Beach Haven teacher Annette Bryant is typical of many ordinary Aucklanders who found a rates increase - $106 in her case - a burden this year.

"It's a lot of money to find ... and with three teenagers, I have to budget carefully to make sure there is enough to pay the bills," she said.

As higher rates bills arrive in letterboxes, opposition MPs have criticised councils and the Government for loading extra costs on ratepayers.

National Party local government spokesman John Carter said many councils had become pseudo-tax collectors for the Government, which had passed 60 pieces of legislation in the past five years that shifted more responsibility to councils.

Act leader Rodney Hide will introduce a bill to Parliament on July 26 limiting increases in rates.

Under Mr Hide's bill, rates increases would be capped to the level of inflation plus 2 per cent in any year, and inflation plus 4 per cent over any three years.

Peter McKinlay, a consultant on local government issues, said there were several factors behind the rate rises. These included councils holding rates down for years by deferring necessary expenditure, the Resource Management Act setting higher environmental standards, ratepayer demands for better facilities and the Government shifting more activity on to local government, from the Building Act to microchipping of dogs.

Mr McKinlay said councils had also been afraid to borrow, leaving today's ratepayers paying for facilities that benefited the next generation. He said people moaned about rates bills but did not get nearly as excited about power bills, which were often higher.

The rates bill covered water and sewerage systems, roads, libraries, art galleries and playing fields. "The list goes on and on ... it highlights the fact that councils do actually provide an awful lot that people take for granted," said Mr McKinlay.

Auckland City chief executive David Rankin said rates represented good value for money. People did not realise the wide range of services provided by rates, such as world-class water and treatment of sewage or that most spending on roads and public transport came from rates.

People wanted more and better public facilities and there was no "painless" way of paying for it.

From this month, the Government has increased the rates rebate to $500 a year and raised the income threshold to $20,000 at a projected cost of $50 million.

Do you have a question about rates or the way your money is being spent? Email the Herald Newsdesk and we will put the best questions to councils and bring you their answers in our special report Rates on the rise

http://www.nzherald.co.nz/section/story.cfm?c_id=1&ObjectID=10390709

[muppet]

Hi Guys

Auckland City bills will climb on average by 54 per cent over the decade. If inflation averages 2.5 per cent for the next 10 years, that would add up to 28 per cent over the decade.

This is quite scary. As our population ages and more and more people will reach retirement age during the next decade and of which many of them will take a drop in income I think there will be alot reneging on paying their rates bill.

I can feel a very big rates revolt beginning to appear on the scene in a few years time.

Regards

[muppet]

Eight per cent of people in severe hardship

1.00pm Tuesday July 11, 2006

A new report on living standards in New Zealand has put 8 per cent of the population in the "severe hardship" category.

The data for the Ministry of Social Development's report, released today, was gathered in 2004 and the proportions have not changed significantly since a previous survey in 2000.

It found 76 per cent of people had "fairly comfortable" to "very good" standards of living.

Maori and Pacific people, on average, had substantially lower living standards than the population as a whole.

Their incomes were lower, they had fewer assets and compared with other groups more of them were beneficiaries.

http://www.nzherald.co.nz/section/story.cfm?c_id=1&ObjectID=10390752

Enough said.

[whitt]

Damn this all mine will hit $2800 next year ouch!!

[tricky]

Beach Haven teacher Annette Bryant is typical of many ordinary Aucklanders who found a rates increase - $106 in her case - a burden this year.

"It's a lot of money to find ... and with three teenagers, I have to budget carefully to make sure there is enough to pay the bills," she said.

Is Annette having difficulty finding an extra $106 during the year?
An employed homeowner can't find $2 per week?
And is this typical of Aucklanders?

[muppet]

Councils explain why rates bills keep rising

Wednesday July 12, 2006
By Wayne Thompson

Average rates bills are going through the roof - with promises of more increases for years to come. Today is the second of a three-part series investigating why our rates keep going up.

Auckland's four city councils say they are putting up rates to pay for multimillion-dollar projects and meet rising costs of construction, borrowing and Government regulations.

North Shore Mayor George Wood said his council intended to spend $1704 million on capital works in the next decade, which could mean average rates increases of about 8 per cent for each year to 2015-16.

The city's 10-year spending plan also included $567 million on transport capital works, including a series of park and ride stations along the Northern Busway and $255 million on waste water works.

He said the council was getting some criticism for spending so much on infrastructure, though it was still in "catch-up mode" after years of failure to address problems.

"But what about the environmental benefits?" he said.

"We have taken some bold decisions which are now paying dividends such as cleaner beaches and a sewerage system that does not overflow every time it rains."

Auckland City Council has a $2.2 billion list of projects for the next decade. It includes $100 million for international facilities such as Eden Park, which is to be expanded and improved for the 2011 Rugby World Cup.

Manukau City Council plans to spend $1.486 billion on works, including $22 million on the connection to the Waiouru Peninsula from the Southern Motorway.

Waitakere City Council, which is moving into a $38.5 million civic centre and council offices in Henderson, plans to spend $150 million on a balanced programme of road improvements, railway station upgrades, walkways and cycle-ways.

In addition to capital works, the councils' rate rises are to pay running costs - some caused by factors beyond their control.

Waitakere chief executive Harry O'Rourke said outside influences on rates ranged from fuel costs and interest rates to Government policies and regulations.

Government measures such as the Building Act and the Resource Management Act had given councils extra responsibilities in processing and monitoring, which added to the ratepayer burden.

"In the last four to five years we have kept our internal costs close to the level of inflation but things like worldwide price rises in oil, steel and cement have raised construction costs."

Mr O'Rourke said it was not uncommon in the past for councils to artificially keep rates low by not renewing infrastructure such as sewer pipes.

"Nowadays we build and maintain things to a higher standard so these costs don't hit ratepayers heavily in the future."

Borrowing for projects has also allowed councils to keep rates increases low and spread the cost among those who benefit by the works.

North Shore City Council finance director Dale Lott said a "main driver" of rates increases was interest on loans and repayment of debt.

The council's policy was to repay up to 20 per cent of its debt a year once it reached a certain level. By 2014 it would be repaying $70 million of debt in that year.

The interest bill for 2006-07 is $12.5 million, rising to $17.4 million in 2007-08.

Councils say a further factor in rates increases is providing for replacement of assets, such as water pipes, bus shelters and pensioner flats.

Auckland City said allowing for depreciation of assets took $100 million from the $390 million it would receive from rates.


Do you have a question about rates or the way your money is being spent? Email the Herald Newsdesk and we will put the best questions to councils and bring you their answers in our special report Rates on the rise.

http://www.nzherald.co.nz/section/story.cfm?c_id=1&ObjectID=10390892

[John Hutchinson]

Interesting that rates and the rating system are starting to feature in the provinces as well. Below is an article from the Hb Today which was followed up by a strong editorial the same night.


18.07.2006
LAWRENCE GULLERY
The property-based rating system used in Hastings is unlikely to change, despite calls for a review of the way councils are funded.
The Auckland City Mayor Dick Hubbard and Federated Farmers' president Charlie Pedersen called for the review before the start of the Local Government New Zealand conference in Wellington on Monday.
Local Government Minister Mark Burton will address the conference but is not expect to reveal anything new. The Government is waiting for the completion of the local government funding project, which will look at the rating system, but that project has been delayed for years.

Hastings deputy mayor Cynthia Bowers said the current property-based rating system had stood the test of time and changing to a new system, such as one determined by central government, could undermine regional areas such as Hawke's Bay.
"If you move to central system I think there are real risks for smaller communities," Cr Bowers said.
"We may see the bigger cities like Auckland, which has more muscle, acquiring funding, whereas it might not be so favourable for us.

"There's a certainty in our system ... it's about local people making local decisions and funding accordingly," she said. Cr Bowers said she thought the focus should be on what central government should be helping councils finance rather than the way councils collected rates.
"Under the Local Government Act we have to deliver community outcomes the communities expectations have been raised.

"One of those outcomes is for a safer community and we've moved to have security cameras (CCTV) installed which needs to be funded by central government," she said. Cr Bowers said the council had looked at using a capital-based rating system but changing would be a major exercise for ratepayers.
"Capital values don't tend to fluctuate. It probably is a fairer model but there's a lot of pain changing from one model and we haven't been convinced that it's worthwhile.
"We are reviewing our system of collecting rates, but at the end of the day it is a property tax and I don't see us changing from that," she said. * Editorial - Page 6