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Decisions continue on draft 10-year budget

Media release

6 November 2014

Decisions continue on draft 10-year budget

Auckland Council’s Budget Committee today made decisions regarding its rating policy for the draft Long-term Plan (LTP) 2015-2025, council’s next 10-year budget.

The following decisions on rating policy make no difference to the overall amount of money council receives from rates; instead they are decisions about the distribution of rates among business, residential and farm/lifestyle ratepayers.

The Budget Committee voted to keep the fixed portion of rates (known as the Uniform Annual General Charge - UAGC) to its current proportion of 13.4 per cent of rates. Adjusted for the 3.5 per cent rate increase (as decided yesterday) the UAGC is proposed to be at $385. This is the amount every ratepayer pays to council regardless of the value of their property.

The level at which the UAGC is set affects the amount of rates raised from high value properties and low value properties. For example, if the UAGC is increased to $500 per year, then rates will rise for lower value properties and drop for higher value properties. If the UAGC is lowered to $250, rates will rise for higher value properties, and drop for lower value properties.

Mayor Len Brown says: “Differences to the UAGC have an impact on how rates are distributed across our communities and are always hotly debated. Today we agreed to keep the UAGC at its current level which reduces the rates impact of high revaluations on middle and low income households.”

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The Budget Committee also agreed to set the business sector contribution at 32.8 per cent of total rates revenue for 2015/16, down from 33.3 per cent in 2014/15. This delivers an average benefit to business ratepayers of $260. The business sector differential is now set to reach a proportion of 25.8 per cent by 2025/26.

The Committee also decided to move from a ratio approach to setting business differentials to a percentage proportional approach. This change removes an unintended windfall benefit to businesses that would have resulted from the recent revaluations. The new approach also avoids an additional rates cost of 5 per cent for households.

Summary of other decisions:

Proposals for Maori: Confirmed funding for priorities for the Maori transformational shift, which include a signature Maori event, Marae development and Papakainga development.

City Centre Targeted Rate: Agreed to continue the City Centre Targeted Rate for the duration of the LTP. Secondly, while the targeted rate will largely fund capital projects, the operating costs and depreciation of those projects will now be funded from the general rate.

Business Improvement Districts: Agreed a resolution for staff to carry out work with the Business Improvement District (BIDs) and relevant local boards on the nature and costs of council support services provided for BIDs to ensure value for money.

Standardising and increasing social housing rent: Agreed to standardise the rent on council’s social housing units to be based on 30 per cent of tenants’ gross income. Secondly, agreed changes to annual rents (including increases or decreases) be capped at $780 per unit (equivalent to $15 cap on weekly rents).

Standardising fees and charges: Agreed to standardise from the diverse policies of the legacy councils the fees and charges for street trading, cemeteries and other services, with the exception Hauraki Gulf islands, which will be discussed further at the next Budget Committee meeting.

The decisions made today are a starting point to include in the draft budget. The plan can, and will change following consultation with Aucklanders early next year.

Ends

Next steps:

• Decisions made November 5 and 6 form the draft of the LTP 2015-2025

• Draft LTP is developed for adoption on December 18

• Aucklanders have their say from late January – mid-March

• Amendments made to the draft LTP

• Final LTP is due for adoption in June 2015


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