ARC head explains thinking behind rates system

ARC head Gwen Bull answers questions about the rate take

Q. What has the council done to show it has listened and acted on concerns over last year's transport rate?

A. In October and November we reviewed our transport rating policy and undertook a large consultation exercise. Almost 5000 people filled in our questionnaire and others wrote us letters and emails. We also reviewed all the feedback we received over the rating period. As a result, we developed the alternative transport rating method. We are now presenting this method as an option in our draft plan and asking people to tell us whether they want the new methods or want to stay with the status quo.

Q. Why should people support the status quo?

A. Staying with the status quo means almost all ratepayers will get an increase of about 3.2 per cent in their ARC rates bill. If we change the policy, some will experience large swings, up or down. The new transport rating method is based on the level of public transport services in each area, which reflects what people told us they felt was fair. However, ratepayers also told us they don't like large increases, which would happen to some in another big policy change. This is why I support the status quo.

Q. Are Aucklanders selfish, or will they choose the cheapest option for them?

A. One of our questionnaire questions is, did you base your choice of rating policy on the one which gives the lowest rate for you, or on which is fairest for everyone? We will be very interested to see whether people think of the bigger picture or just choose what is best for them.

Q. What is the main argument against introducing a business differential?

A. The ARC rate is based on the capital value of properties. Using capital value compared to land value increases the rating share paid by the business sector and reduces the share paid by the rural sector.

Under a land value system the business sector would pay 12.7 per cent of total ARC rates. Under capital value, business ratepayers are contributing 16.7 per cent.

So there is already an inbuilt loading on to business using a capital value system.

Q. If the overwhelming mood is for changing the system, when is the appropriate time to change?

A. The appropriate time to change the rating policy will be in June when we set our regional plan for the year. What is the size of the rates increase planned for 2005-06? The forecast if for a 15 per cent increase for the year after next. Remember, though, that every year the actual rate we set is up for review. We had an 18 per cent increase forecast for this year and thanks to extra Government support for public transport we are now proposing only a 3.2 per cent average increase for this year.

Q. Why does it need to rise?

A. The biggest new cost for the 2005-06 year relates to further improvements to bus and ferry transport.