KEY POINTS:
Rate increases above inflation should be considered to maintain Auckland City and the needs of citizens, says City Vision-Labour leader Richard Northey.
If that meant rates increases of 6 per cent to 7 per cent next year "then so be it", he said.
Mr Northey was speaking yesterday at a council meeting to set the strategy for next year's budget and a new 10-year budget.
The ruling bloc of Mayor John Banks and Citizens and Ratepayers have promised to hold rates to the council rate of inflation after inheriting double-digit rate increases from the previous council.
The process of preparing the new budgets has coincided with what Mr Banks called a "global financial apocalypse" and chief executive David Rankin described as "still breaking news" on changing global conditions.
But in what amounted to a philosophical debate, Mr Northey and his City Vision-Labour colleagues cautioned against holding rates to council inflation, about 5 per cent next year.
Mr Northey said councillors were aware of the financial pressures facing families and businesses and the need for a thorough examination of the existing 10-year budget.
But holding rates to council inflation was an artificial measure, and it would be better to base rates on service levels that provided for the needs of the city and citizens.
There was also a case for the government and, to a lesser extent, local government, to increase spending to maintain employment, quality of life and community spending power.
He cited National's promise to increase spending on infrastructure.
Mr Northey said the city's infrastructure backlog - the main reason for a big-spending capital programme in the current 10-year budget - was the result of past councils holding rates to inflation or less.
C&R leader David Hay said the 10-year budget forecast rates would go up by 35 per cent in the three years of this council.
The public had warmed to this "fantastic spend-up" and it was going to be difficult to cut projects, he said.
Mr Banks said the council was going to have to "batten down the hatches and weather the storm".
Difficult and unpopular decisions lay ahead but the intention was to balance this with "affordable progress".
Mr Rankin said there were "no great mysteries or silver bullets" to holding rates to council inflation and dealing with the economic climate.
The council will begin considering cuts to specific projects on November 18.
Significant cuts will be made to capital works, and service levels to core council services such as parks, libraries, swimming pools and footpaths are going under the microscope.
