Council wipes payment breather

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A gesture to ratepayers under financial stress - a breather before incurring a late-payment penalty - is to be wiped by the Auckland Council.

Residents in the former Waitakere City Council had three months' grace to clear the previous year's rates bill before 10 per cent was added for late payment.

Budgeting advisers say the leeway was welcome relief in the recession.

But the gesture will not be carried over into the new Super City.

Councillors are considering a standard rates policy to treat all ratepayers in the region the same and to simplify administration of 500,000 bills.

In the rates bill for 2011-12, which will rise by 4.9 per cent, the council has other changes in store.

It will cut to 1.5 per cent the early-payment discount given by the former councils for Manukau City, Papakura and Rodney Districts and the Auckland Region.

Standardising rates will also hit customers of the former North Shore City Council. They could pay the annual levies in six instalments. Under the Auckland Council, they will have to pay in four instalments.

Officials say a reduction to four bills will save $500,000 a year in processing costs.

A council spokeswoman said penalties for late payment would accrue at 10 per cent from the rates instalment due date, and the previous year's rates arrears would be added at the beginning of the financial year and then six months later.

Instalments must be paid on the second-to-last business day of August, November, February and May.

In Waitakere, the average household rate was $2000.

Waitakere Local Board deputy chairwoman Janet Clews said she understood the need for a standard system, "but it seems harsh to just wipe the three-month additional grace period before the penalty was applied".

"This was a humanitarian gesture which was appreciated, was seldom abused and which could equally well be handled by the Auckland Council.

"I ask councillors to remember that the pockets of many ratepayers are a good deal shallower than their pockets.

"Standardisation does not have to mean taking the most hard-line approach; showing some empathy does not mean going soft."

Lynn Goold, the chairwoman of CARE Waitakere Trust, a budgeting advice service, said the new penalty would hit its clients.

"It's discouraging to budget and get immediately slapped with a penalty because you cannot pay right on time. Any penalty must be put in place gradually to give people plenty of notice."

Last year, Auckland City Council took $7.8 million in penalties on rates, up from $4.8 million in 2009. Its total rates take was $590 million.