30 July 2012

COMMENTARY by David Thornton – on Auckland Council rates.

Mayor Misleads Ratepayers – And Only Parliament Can Protect Ratepayers.

Mayor Len Brown misleads ratepayers with his repeated claim that his new rating system is ‘fairer to everyone’ because properties of equal value will pay exactly the same amount of rates.

What he studiously ignores is the fact that, the household incomes of ratepayers of equal value homes, are not equal.

When Mayor Brown talks about an average rates increase of 3.6% he is toying with the reality of the situation. This figure of 3.6% refers to the increase in the amount of total rates income the council wants to raise.

Of course Mayor Brown follows this same misleading path all councils use to explain their rate increases.

Very few ratepayers pay the ‘average’ increase.

The facts in Auckland are that 46% of residential ratepayers will have increases of between 5% and a maximum capped at 10%, while only 29% will receive a decrease of a maximum capped at 5.6%. The remaining 25% will get an increase or decrease of up to 5% - and maybe a few in this group will in fact get Mayor Brown’s 3.6% increase.

These percentages were provided to me by officials at the council and disprove Mayor Brown’s statement in today’s NZ Herald that ‘Most people will be around the average’.

More disturbing is the ‘Winner and Losers’ table published in the NZ Herald which clearly demonstrates that, generally, the heavily populated North and Central/Eastern suburbs suffer the greatest increases, while suburbs in the South and West mostly enjoy decreases or increases below 2%.

With average changes ranging from a decrease of 3.9% in Franklin to an increase of 8.4% in Albert-Eden, the level of wealth redistribution can only be considered as unacceptable.

Will ratepayers revolt by withholding their rates?

In the 2003/4 Regional Ratepayers Rebellion 140,000 ratepayers withheld all or part of their rates when the former Auckland Regional Council rates bills were sent out. Over a period of 18 months most of those rebels finally paid up but that rebellion was acknowledged as the cause of the downfall of many ARC councillors at the 2004 election.

But, with or without a similar rebellion, it is not difficult to forecast that a similar fate may well befall many current members of the new Auckland Council, and probably the Mayor as well.

The effect of this year’s rates increase is arguably greater than in 2003, but this time there has been a very expensive advertising campaign to soften up ratepayers by aiming to sell the Mayor’s vision of ‘the world’s most liveable city’ and by the ‘fairer rates’ campaign.

It seems that the public has largely refused to accept this vision, nor has the public accepted the Mayor’s claim that his rates policy is fair to all.

But with the rates bill now on the way to the letterbox what can the individual ratepayer do?

There is hope on the near horizon in the form of the Local Government Amendment Bill, currently before Select Committee, which will have the effect of limiting council spending and levels of rates increases.

The Bill passed first reading by only one vote – and all local councils have announced their opposition to key parts of the Bill.

On the other hand many ratepayer groups and individuals have made submissions welcoming and supporting the Bill.

Mayor Brown is deeply concerned that if the Bill becomes law in its present form the Auckland Council will have to rewrite its Auckland Plan and the 10-year budget with its 4.9% annual rates increase.

Ratepayers could not care less about Mayor Brown’s plans – all they care about is the size of the rates bill about to arrive in the letterbox.

The best chance ratepayers have to change all this is by enlisting the support of MPs, of every Party, to support the Amendment Bill in Parliament.

Despite the cries of outrage about the loss of local democracy in the Bill, councils are creatures of statute, and only Parliament can now protect ratepayers from extravagant and unresponsive councils.

ENDS

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