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The Big Rates Row

9 March 2005

The Big Rates Row

ARC blocks 'equal shares' plan


In the wake of Auckland's massive Rates Revolt by homeowners, a majority of the 13 regional councillors were elected last October on the promise of "fair rates".

So far, however, only RAM councillor Robyn Hughes has voted to restore homeowners to the position they enjoyed before the Rates Revolt.

On 23 February, Hughes moved that the ARC stop chasing penalties on disputed rates and put them to one side in a "holding account".

But not another regional councillor would support her.

Days later came a vote on the central issue in the rates row - the business differential.

The astronomical home rate rises of 2003 happened because Gwen Bull's council axed the differential.

The Rates Revolt forced the old council to restore a differential of 1.5, meaning that business rates were one-and-a-half times more in the dollar than home rates.

But such a tiny differential went nowhere near reversing the rate rises of most homeowners.

On 7 March the new ARC chair Mike Lee, elected on a Labour-led City Vision ticket, moved a microscopic rise in the differential from 1.5 to 1.6.

Even Lee conceded this merely entrenched the status quo inherited from Gwen Bull's regime.

But he warned of a legal challenge from corporate lobbyists if any higher differential was adopted.

In response, Hughes advocated RAM's "equal shares" rating policy. Under RAM's plan, business and homeowners would each pay an equal group share of the council's total rates take.

That would mean a differential between 4 and 4.5.

While businesses make up just 6% of total ratepayers, they benefit from most of the ARC's services, get state perks like tax write-offs and have far more ability to pay.

Again, Hughes couldn't get backing from any other councillors. Some on the centre-left attacked her for spreading "misinformation".

Even a "soft" compromise differential of 2 proposed by centre-left councillor Sandra Coney failed.

So Lee got his way with a 1.6 differential, which will go into the ARC's draft plan for "public consultation".

In protest, Hughes resigned as the council's deputy finance chair.

"I cannot play a leading role in a committee that oversees the ARC's rates when it's following a policy that denies equal justice to home ratepayers," she explained.

Hughes continues as an ARC councillor.

These are just the opening shots in a campaign that will stretch to at least the next council election in 2007.

RAM will promote our "equal shares" rates plan among the grassroots.

We're confident it will strike a chord with homeowners, many of them the same workers who want pay justice from the same bosses who oppose a higher rates differential.

ARC councillor Michael Barnett, who heads Auckland's Chamber of Commerce, is campaigning equally hard against a 5% pay rise and any lift in the differential.

RAM is standing firm against the corporate lobbyists in defence of the grassroots.


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