Government urged to revise rating system

By BERNARD ORSMAN

Pressure is growing on the Government to overhaul the rating system in light of the revolt against Auckland Regional Council rates rises as high as 657 per cent.

Rodney District Mayor John Law yesterday predicted more ARC rates increases unless the Government brought in alternative funding sources for local authorities.

"The fact is that ratepayers have simply had enough of being targeted to fund infrastructure, transport and roading. Enough is enough," he said.

Mr Law was commenting as the ARC bills go out to Auckland City, Manukau, Waitakere and Papakura ratepayers, arriving in letterboxes from today.

The first wave of bills to North Shore and Rodney properties sparked a ratepayer revolt last week.

Auckland's mayors have been pressing the Government for new ways to pay for roads and public transport, such as a regional petrol tax. A working party has been set up to look at the issue.

But Finance Minister Michael Cullen last week told mayors that when it came to fixing Auckland's rundown rail network, the Government expected the region to pay.

Local Government New Zealand, which represents all local authorities, has also urged Local Government Minister Chris Carter to look at alternative funding sources.

The body told Mr Carter a year ago that many communities were at the limit of their ability to finance council activities through rates, partly because of the added responsibilities the Government kept loading onto them.

Local Government NZ chief executive Peter Winder said councils and the Government recognised that funding and infrastructure were linked, but the issue could not be solved easily. It would be discussed at a local and central government forum this year.

"You are talking about something that is fundamental to the performance of the New Zealand economy and the basis of the taxation system."

Mr Winder said the ARC case highlighted some of the downsides of rates as a means of raising revenue, particularly for people on fixed incomes.

A spokesman for Mr Carter said the Government had passed two laws giving councils more flexibility to pass on the cost of activities and was looking in next year's Budget at raising the threshold for rates rebates, which had not changed since 1990.

Mr Law said the ARC rates problem should be placed before voters at the next general election in 2005.

MPs had to understand that the ratepayer uprising had deeper implications than the ARC system of capital value rating, he said.

"Local and regional government should not have to tax ratepayers for roading and transport.

"Ratepayers are not the only users of roads, buses and trains. Users of these services should be paying through a petrol tax, tolls, fares and other initiatives," said Mr Law.

"I predict that if the Government does not totally overhaul the funding of local government, then the ARC will be forced to introduce even higher rates increases.

"The patronage shortfall for rail and buses will run into hundreds of millions of dollars."

Auckland City Mayor John Banks said that while he did not disagree with the sentiment, "one shouldn't hold one's breath for any change".

The ARC annual report forecasts ratepayer contributions to public transport will rise from $58.7 million this year to $110 million by 2010.

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