Auckland Mayor Phil Goff appears to be sticking to a planned 3.5 per cent rates increase as households and businesses wrestle with the costs of the coronavirus crisis.
Goff said it will be hard to reduce the 3.5 per cent rates rise without compounding council's difficulties and cancelling capital projects.
"Keeping these projects in play will assist with ensuring jobs and incomes vital to our recovery as a community and country from what will be the worst recession since the 1930s," he told the Herald.
His preference is targeted assistance to those most in genuine need through rates deferrals and postponements.
Goff's reluctance to consider a cut in rates or freezing rates, which some councils are doing, is a personal view that will be tested round the council table.
Already, finance committee chairwoman Desley Simpson has refused to publicly back Goff and outline her position.
Deputy Mayor Bill Cashmore said some tough calls will have to be made over the next couple of months before the rates are struck and come into effect on July 1. He, too, has not publicly backed a 3.5 per cent rates rise.
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The planned 3.5 per cent rates rise includes higher costs for waste management and lowering rates for business that add up to a 4.5 per cent increase for households.
The council is taking some big hits from the impacts of Covid-19, including the loss of dividends from Auckland Airport and Ports of Auckland.
It is bleeding money from the fare box for public transport and parking; fewer cars on the road means less income from the regional petrol tax and matching government contributions; revenue from swimming pools, community centres, concerts and sports venues has dried up. Income is falling from development contributions and consenting work.
Albany councillors John Watson, left, and Wayne Walker want council to consider a range of options. Photo / Supplied
Goff said to help compensate, temps, contractors and consultants were being cut, and he and the executive leadership are prepared to take pay cuts. A recruitment freeze has been put in place and desirable, but not essential projects, have been deferred.
He also said council is constrained by its debt to revenue ratio, which, if breached, could lead to a credit rating downgrade.
"With revenue already down, a further reduction in rates would compound council's difficulties, requiring the cancellation of capital projects which the city needs and which could contribute to recovery," he said.
Several councillors are prepared to consider a zero rates increase or a smaller rates rise as option, including Wayne Walker, John Watson, Chris Fletcher, Tracy Mulholland and Daniel Newman.
Fletcher said it was foolhardy at this stage to have a fixed position on rates, saying council had to consider all options from a rates freeze right through to rates reductions and a significant rates relief programme.
Said Walker: "This is a moving situation. We have to recognise there will be a lot of people in homes and businesses hurting and rates are a significant expense."
Whau councillor Tracy Mulholland said she cannot inflict a 3.5 per cent rates rise on her community. Photo / Supplied
Whau councillor Tracy Mulholland said she cannot inflict a 3.5 per cent rates rise on her community at this time.
The debate over rates follows a survey of 1000 businesses by the Auckland Chamber of Commerce which suggests a third will not survive the coronavirus pandemic and will close permanently.
Chamber chief executive Michael Barnett said Auckland Council has been slow to respond to the plight of businesses compared with the likes of Taupo, Bay of Plenty and some councils in the South Island who have come out unequivocally for a zero rates increase.
At other big cities, Christchurch City Council is planning on scrapping this year's planned rates rise to help people get through the crisis, Wellington City Council is talking about a six-month rates freeze for many commercial and residential ratepayers, and Dunedin Mayor Aaron Hawkins says he wants a rates freeze.
Last week, Hamilton City Council signed off on $1 million for social services, authorised early payments to suppliers, and approved consent fees and development contributions support.
Tauranga City Council has cut its proposed rates rise from 12.6 per cent to 7.6 per cent. Taupo and Bay of Plenty district councils are working towards zero rates increases.
Auckland Ratepayers' Alliance spokeswoman Jo Holmes said the economic situation facing Auckland households is unrecognisable from what it was when Phil Goff committed to his 3.5 per cent rates hike.
"The mayor needs to scrap his old spending priorities and urgently rejig council finances so he can assure Aucklanders of a rates freeze," she said.
