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Auckland sets rates policy in line with inflation

Auckland City sets rates policy in line with inflation

The Auckland City Council’s combined committees confirmed today that rates for the next financial year will once again be kept within the level of inflation.

“The 2.4 per cent rate increase for next year will see most residential rates increase by $1.12 per week, no matter what the value of the property,” said Councillor Douglas Armstrong, chairperson of the council’s Finance and Corporate Business Committee.

“It is this council’s policy to increase rates within the level of inflation only and I am proud to announce that once again we have successfully managed to achieve this for Auckland City ratepayers.”

Auckland City’s rates increase is based on the expected rate of inflation for the 2004/2005 financial year averaging forecasts from the Reserve Bank, Treasury, private sector banks and research institutions.

“Auckland City’s rates increase will be among one of the lowest in the region and nationally this year and well within the expected income increases*,” said Mr Armstrong.
Auckland City’s average rates increase will be achieved through changes in the fixed components of rates so that most residential properties will experience the same average rates increase.

* Latest findings from the Statistics New Zealand Income Survey for the June 2003 quarter show that individual and household incomes are increasing steadily year on year.

The average weekly household income in the June 2003 quarter was $1,171, an increase of 5.0 percent from the June 2002 quarter ($1,116). The following rates policy was agreed by combined committees:

A 2.4 per cent average increase in most residential rates for 2004/2005 will be achieved through increases in the uniform annual general charge (UAGC) and the waste collection targeted rate, a total of $58 per ratepayer. This is made up of:

An increase in the UAGC for each property by $39 from $150 to $189. The UAGC is the minimum contribution all ratepayers make to the city for general services that all ratepayers use such as footpaths and parks.

An increase in the targeted rate for waste collection by $19 from $110 to $129 to fully cover the cost of waste collection. The $19 waste collection increase will cover the total cost of providing the service, including the inorganic collection every two years. To date, this rate has covered only part of the full waste collection cost to council, the remainder having been funded out of the general rate.

A continuation of the long-term strategy to gradually reduce loadings on business rates to encourage greater economic growth in the city for the benefit of all residents. By 2013 all businesses on average will pay $1.80 for every $1 paid by a residential ratepayer on a similar valued property.

“If we want healthy economic growth for the benefit of everyone in our city we have to reduce the rates burden we put on our businesses,” said Mr Armstrong.

A targeted rate charged on all CBD properties will go towards significantly speeding up and greatly extending the development of the CBD in addition to the funding already available from the general rate. (For more information on funding for the CBD revitalisation see Auckland City media release Auckland’s CBD revamp gets kick-start, 23 June 2004)

A target rate of $26 will apply to Waiheke Island ratepayers to fund the upgrading of Waiheke Refuse Transfer Station to meet environmental standards over a ten-year period. This will help recover full costs instead of absorbing the upgrade costs into the general rate. The remainder of the upgrade cost will be funded through increased transfer station gate charges and an additional refuse bag charge.

“We are continuing to invest to maintain the city’s many facilities and activities, as well as enhancing the city for the future, but each year we are working more cost effectively to achieve an improved level of service for Auckland’s ratepayers,” Mr Armstrong said.

Auckland City will receive approximately $440 million in the year to June 2005, of which around 70 per cent will come from rates.

The majority of the council’s spending, approximately $416 million is predicted to be spent on operating expenditure in the year to June 2005. This is an increase from $405 million last year.

Auckland City collected 99 per cent of its rates in the 2002/2003 financial year and to date has received 96.5 per cent of instalments for the financial year 2003/2004. Once again this year the Auckland Regional Council (ARC) will collect its rates separately to the city council.

The rating policy accepted at the Combined Committees meeting today will be included in the council’s long-term council community plan (LTCCP) Final Focus on the Future 2004 – 2014 which will be published in July.

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