MEDIA RELEASE

March 18, 2002

Rates increase held to 90 cents per week

Auckland City residential property rates will increase by less than a dollar a week under a new proposal.

Deputy Mayor David Hay says the Auckland Citizens and Ratepayers Now (ACRN) team of councillors supports a 90-cent per week increase in rates for residents.

Total rates collected from all existing ratepayers will increase by 1.6 per cent to cover inflation. This amounts to a $4.3 million increase.

"We have managed to hold the rate increase to this level even though the legal requirement to fund for depreciation means that we have had to absorb a depreciation charge of $10 million into the budget," said Mr Hay.

Mr Hay says that the Auckland Regional Council has not yet finalised its budget for next year, and any increase in the ARC levy will also need to be passed on to ratepayers.

"In 2003/4, under new legislation, this ARC levy will be paid for separately and will mean ratepayers will have a better idea of where any cost increases have occurred.”

He says the council will introduce a flat charge of $47 per year (90 cents per week) which will partly pay for the real cost of rubbish collection and disposal.

Mr Hay says rubbish collection is presently included as part of the total rates bill which is based on individual property values and which hides the true cost of the collection and disposal.

"We know that the real cost of collecting and disposing of rubbish is $121 per property. Once people become aware of how much it actually costs we expect the volume of rubbish to diminish in the long term and this will benefit the city environmentally."

Mr Hay says that under the new proposal, every residential property in the city will pay exactly the same rates as last year plus $47 (plus any adjustment in the Auckland Regional Council rates). This will cover inflation while shifting some of the burden of rates from the business community by continuing with a programme set up by the previous council to reduce the gap in rates paid by business ratepayers and by residential ratepayers.

"Three years ago the previous council commenced a 10-year program to bring fairness and equity into the system of differentials, which presently results in non-residential properties paying up to two and a half times the rates of a residential property of the same value.

"We support the continuation of this policy," says Mr Hay. "However, like the last three years it will mean that more of our rates revenue will come from residential ratepayers with a corresponding reduction in the rates paid by non-residential property owners.

"The effect this year is a 1.2 per cent increase in the total rates paid by residential sector. This has been included in the calculations for a 90 cents per week increase for each individual property.

"Eighty-five per cent of the properties in Auckland are residential and they presently pay only 44 per cent of the city's rates.

"It is only fair the differentials drop to a more balanced level over time.

"Our proposal to cover the adjustment for inflation and the shift in the differentials, as a fixed charge, will keep the rates for each residential property fixed to the same as last year plus $47. It will give every residential property owner certainty and a fairer system," says Mr Hay.

ENDS

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