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Forecast Rate Increases Could Collapse Local Govt

Chairman; David Thornton

media release 6 October 2005

Statement by David Thornton following the report in today’s North Shore Times that council rates will need to rise by 6-7% each year for the next eight years to meet a one billion dollar infrastructure bill.

Forecast Council Rate Increases Could Collapse Local Government

The prospect of huge rate increases in North Shore City Council rates over the next 8-10 years will send icy shivers of apprehension down the spines of many ratepayers – especially those on low and fixed incomes.

And the North Shore City scenario is windowed right around the country – huge rate increases to pay for aging or inadequate infrastructure.

In July next year there will be improvements to the Rates Rebate scheme which were announced earlier this year by the government –as part of the Labour party’s election campaign.

The changes were designed to relieve the rates burden on low income earners, superannuitants and beneficiaries

But the increases in rates now being forecast will, almost immediately, wipe out any new benefit from the additional rebates scheme.

On top of the North Shore City Council rates there will be substantial increases in Auckland Regional Council rates to pay for the rising cost of subsidising public transport – notably the rail system – and to meet the cost of public transport infrastructure.

The current rating system based on the estimated sales value of property will not sustain the constant demand for higher and higher rate increases.

The elderly will be the first to suffer –and this is ominous in a society in which the fast growing age group in terms of population is the over-65s.

It is now a matter of extreme urgency that new methods of funding local government must be found which will reflect the individual's ability to pay.

If nothing changes the whole local government system may well collapse.


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