37pc rate rise for Auckland City residents

Dick Hubbard

Auckland City residents are staring down the barrel of a 37 per cent average rates increase during the term of Mayor Dick Hubbard and his City Vision/Labour-controlled council, equating to an extra $400 a year per household.

What's more, the council plans to increase household rates by 135 per cent and water bills by 50 per cent over the next decade to fund a $2.3 billion capital works programme to cope with growth and years of under-investment in basic facilities such as stormwater and footpaths.

Ten years of increases will take the average household rates bill from $1250 to $2900 and water bills from $800 to $1200 - a total of more than $4000, or $80 a week.

Last night, Mr Hubbard said the council was taking the hard calls on the chin and not taking the easy political route.

"You are damned if you do and damned if you don't.

"If you don't do it then infrastructure goes downhill and you end up with a city in a worse condition than what you started with.

"Secondly, there is the clear mandate that Aucklanders want things done and we are a city of action that doesn't want to sit round for a number of years.

"And thirdly, the waterfront development [at the Tank Farm] and Eden Park stadium are a window of opportunity to do something. If not, those opportunities are gone forever," Mr Hubbard said.

Having started with a 9.7 per cent average household rates increase and a 13.3 per cent increase this year, Mr Hubbard's left-leaning council is lining up another 10 per cent raid on household wallets just before next year's local body elections.

Councillors planned to keep down rates in election year but officers have spoiled the party by forecasting a base inflation rate of 5.9 per cent as the result of rapidly rising labour, construction and oil costs. The Reserve Bank is predicting an official inflation rate of 3 per cent next year but new rules from the Office of the Auditor-General mean councils have to forecast their own inflation rate.

The difference between the official inflation rate and the council inflation rate concerns some councillors, who claim it will create confusion and be difficult to explain.

The 10 per cent household rates increase next year is made up of 5.9 per cent for inflation, 2.1 per cent above inflation and about 2 per cent for the next step in a plan to reduce the higher level of rates paid by businesses.

By opting to increase rates above inflation and borrow $1.3 billion over the next decade, the council plans a $2.3 billion spend-up to get on top of rundown services such as footpaths and stormwater, meet the heavy demands of growth and try to become a world-class city.

Mr Hubbard said Auckland City was becoming more sophisticated and had to become a lifestyle city to attract economic development to compete with cities in Australia and Asia.

He was keen to upgrade Eden Park for the rugby and cricket world cups and use "a once-in-a-lifetime opportunity" with the Tank Farm to create a world-class legacy for future generations.

As well as squeezing the council's water business, Metrowater, for alternative sources of funding, the council has also raised development levies by 20 per cent, environmental health fees 10 per cent and land information memoranda (LIM) fees 5 per cent.

The opposition Citizens & Ratepayers Now council team has promised to hold overall rates to inflation if it regains control of the purse strings next year but has given no details of how it would achieve that.

Finance committee chairman and City Vision councillor Vern Walsh said he appreciated people were paying higher rates "but we really have to make the tough decisions and grapple with the problems we have got".

"It would be irresponsible of us as a council to take the politically pragmatic route of not facing up to the problems that the city has and the infrastructure requirements of the future."


WHERE IT ALL GOES

Average household rates during this term:

2004 $1140
2005 $1250
2006 $1390
2007 $1540

Increase in three years: $400

Where some of the rates increases are going over the next decade:

* Eastern transport corridor $800m
* Tank Farm $338m
* Other transport projects $208m
* Footpaths $83m
* Stormwater $62m
* Eden Park up to $60m
* Aotea Square $24m
* Swimming pools $20.4m
* Auckland Zoo $7.5m
* Restoring Pah Homestead $5m
* Town Hall organ $3m
* Blake memorial $2m

Figures are gross. Some projects attract subsidies or help from other funding sources.