AK Council pre-election report means higher rates increases
The nationwide campaign to reform the present system of council rates –
Founder – David Thornton
Media release 13th August 2013 [statement by David Thornton]
Auckland Council pre-election report means higher rates increases ahead.
SuperCity is proving costly to ratepayers.
Ten years ago this month Auckland ratepayers revolted in a spectacular fashion. 140,000 ratepayers withheld all or part of their rates. A few thousand rebels marched up Queen St one Saturday morning, and 40,000 ratepayers signed a petition calling on a council to re-set its rates.
The cause of this ‘ratepayers rebellion’ was the decision of the former Auckland Regional Council to substantially increase the amount of rates it collected and to invoice ratepayers directly.
This was the start of a decade which saw council rates feature as a constant news item around the country. Constant advocacy and public pressure led to an Independent Rates Inquiry six years ago, and then to a Royal Commission on Auckland Governance, followed by Rodney Hide’s unpopular creation – SuperCity.
As the first term of SuperCity comes to an end a huge cloud hangs over the city’s ratepayers who are likely to see an explosion of rates increases to pay for the mountain of debt and interest payments now building at an alarming pace.
Last year the Council increased its self-imposed ‘prudent’ debt limit from 175% of total revenue to 275% of revenue which has allowed a huge increase in the amount the Council actually has borrowed or plans to borrow.
Figures revealed in the Auckland Council 2013 Pre-election Report show debt rising swiftly to 213% of total income, and interest payments rising to more than $21 dollars of every $100 of rates collected – and likely to reach the prudent limit of $25 dollars in every $100 in a couple of years time.
The Report states, in typical bureaucratic language, “the increase in our net debt percentage of total revenue reflects a lower level of rates increase”. In simple terms the council is not raising sufficient income from rates to reduce debt and meet interest payments.
The solution will inevitably involve much higher rate increases in the years ahead.
It is impossible to accept Mayor Brown’s claim that he aims to keep rates increases at about 2.5% for the next three years.