Auckland mayor Len Brown lacks public support for his ‘Interim’ Transport Targeted Rate.

Levy here to stay if Government says NO

In his report to Council on 30 April Auckland Mayor Len Brown proposes an interim ‘levy’ on all ‘Separately Used or Inhabited Part of a property’. (SUIP). The annual rate would be a fixed charge of $159 per business ratepayer and $99 for each residential ratepayer. These charges will also attract GST at 15%, which is usually deductible for businesses.

A ‘possible’ levy of $58.99 per ratepayer was identified in the Consultation Document (page 45) as part of the public consultation process on the new Long Term Plan, and indeed was commented on by the Auditor-General

Also mentioned was an option to use a ‘value based’ target rate on all properties using the same differential categories and ratios as the value based general rates – in other words spread the cost across all ratepayers based on the capital value of their property.

In his 30 April report the Mayor stated that “I believe a clearly identified fixed amount, identified as an interim transport levy, would be supported by the majority of Aucklanders”

The Mayor did not offer any statistical or other evidence to support that claim.

In fact, results from the special Colmar Brunton survey revealed that the option of rate increases (plus fuel tax increase) was the least preferred option for additional transport funding - 31% as opposed to 57% in favour of motorway charges.

This additional new charge would apply to “.. each shop in a shopping mall or for both the main house and any attached minor dwelling or granny flat..”. It would also apply to each unit in a retirement home while a hotel would only be charged as a single property. Many large commercial buildings may also attract one single charge.

A multi-storey hotel with a capital value of millions would pay only $159, while a small one-bedroom ‘granny’ flat would pay $115 including GST. Such a discrepancy hardly seems fair.

Most people would regard this additional charge as an increase on the rates bill – although the Mayor apparently gets annoyed if anyone calls his’ levy’ a rate increase. There is no such charge as a ‘levy’ in the Local Government (Rating) Act – in fact the word ‘rate’ is defined in the Act as including a Targeted Rate.

This fixed targeted rate, applied in this way, means that all residential properties, flats, individual retirement units etc. will pay the same amount of $99 + GST ($114) irrespective of value. Similarly all business premises will pay the same amount of $159 (assuming GST is neutral)

Despite the Mayor’s claim of consulting, he did not directly test the view of ratepayers on this new ‘levy’. A targeted transport rate is offered as a ‘possibility’ in the 64-page Consultation Document and on the special website – but is not mentioned in the 16-page booklet which was delivered to most, though not all, letterboxes.

Nor is it put forward as a question to seek ratepayers preference.

It would have been very simple to include a question on a Transport Levy in the booklet delivered to most homes. And in the survey by Colmar Brunton. He did neither.

This option of flat tax or value based rate may not seem important because, as the Mayor said, it is ‘specifically, for three years only this would mean an additional $2 per week for residential ratepayers, and for businesses $3 a week’. Not a large amount for many ratepayers.

BUT the Mayor is relying on Government permission to charge motorway tolls and new legislation to kick in during that three year period – and if that does not happen there is every likelihood that the $2 - $3 a week transport ‘levy’ will start a journey to the stars.

How can any ratepayer trust the Mayor on this issue when, when, for four years, he has been promising a solution to funding the transport deficit, including the Central Rail Link, and he has failed.

Councillors around the table will need to consider very carefully if they can inflict these additional charges on ratepayers in such a precarious situation.

ENDS

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