Auckland rates bills sure to rise and rise

Auckland households, reeling from the latest round of hefty rates rises, can expect their rates and water bills to keep nudging ahead of inflation for the next 10 years towards $4000.

The coming decade is shaping up as a costly exercise as Auckland councils seek to deal with the issues of growth, years of under-investment in infrastructure and capitalising on the region's natural beauty to become a world-class city.

Local Government New Zealand figures show the average household rates bill of between $1800 and $2700 across the region this year is set to rise to between $2700 and $4500 by 2016.

Once the rise in household incomes is factored in, the proportion of the family budget going on rates is expected to increase from about 4 per cent to about 5 per cent over the decade. This is a rise of 25 per cent.

Auckland City bills will climb on average by 54 per cent over the decade. If inflation averages 2.5 per cent for the next 10 years, that would add up to 28 per cent over the decade.

Beach Haven teacher Annette Bryant is typical of many ordinary Aucklanders who found a rates increase - $106 in her case - a burden this year.

"It's a lot of money to find ... and with three teenagers, I have to budget carefully to make sure there is enough to pay the bills," she said.

As higher rates bills arrive in letterboxes, opposition MPs have criticised councils and the Government for loading extra costs on ratepayers.

National Party local government spokesman John Carter said many councils had become pseudo-tax collectors for the Government, which had passed 60 pieces of legislation in the past five years that shifted more responsibility to councils.

Act leader Rodney Hide will introduce a bill to Parliament on July 26 limiting increases in rates.

Under Mr Hide's bill, rates increases would be capped to the level of inflation plus 2 per cent in any year, and inflation plus 4 per cent over any three years.

Peter McKinlay, a consultant on local government issues, said there were several factors behind the rate rises. These included councils holding rates down for years by deferring necessary expenditure, the Resource Management Act setting higher environmental standards, ratepayer demands for better facilities and the Government shifting more activity on to local government, from the Building Act to microchipping of dogs.

Mr McKinlay said councils had also been afraid to borrow, leaving today's ratepayers paying for facilities that benefited the next generation. He said people moaned about rates bills but did not get nearly as excited about power bills, which were often higher.

The rates bill covered water and sewerage systems, roads, libraries, art galleries and playing fields. "The list goes on and on ... it highlights the fact that councils do actually provide an awful lot that people take for granted," said Mr McKinlay.

Auckland City chief executive David Rankin said rates represented good value for money. People did not realise the wide range of services provided by rates, such as world-class water and treatment of sewage or that most spending on roads and public transport came from rates.

People wanted more and better public facilities and there was no "painless" way of paying for it.

From this month, the Government has increased the rates rebate to $500 a year and raised the income threshold to $20,000 at a projected cost of $50 million.


Do you have a question about rates or the way your money is being spent? Email the Herald Newsdesk and we will put the best questions to councils and bring you their answers in our special report Rates on the rise.