Editorial: ARC has no mandate for these rates

It is no bad thing that Aucklanders are coming face to face with the cost of their regional council. For too long that cost has been largely out of sight in local council rate demands - and largely out of mind. Thus there has been too little scrutiny of what value the Auckland Regional Council delivers in applying transport subsidies and overseeing parks, planning and environmental services. The introduction of direct rating, at the Government's behest, has changed that. Ratepayers who have been hit by ARC rates rises of 200 per cent or more may struggle to appreciate the wisdom of the new approach. But it is certain they will be more questioning of council spending. And they will cast a more inquisitive eye over the ARC's decision-making and use of power.

Already the impact is clear. Ratepayer associations want to mount a legal challenge to the new rates take through the Auditor-General. This would involve relatively narrow legal questions about the way in which the ARC has set its targeted rates, and whether North Shore ratepayers are being forced to pay a disproportionate sum for a rail service from which they derive no benefit.

There is, however, an even more fundamental question: does the ARC have the right to make a substantial change to rating - through the introduction of a capital value system - without an electoral mandate? The legality of the council's action is not the big issue here. Quite simply, ratepayers cannot have envisaged that they were sanctioning this act when voting at the last local body election. And when widespread disapproval is so evident, it is obvious that representative democracy is being mocked.

The unsurprising upshot is talk of a ratepayer revolt. Some have urged a boycott. More sensible is the advice to residents to pay one-tenth of their rates bill by the due date to avoid penalties while a legal challenge is set in motion. That is a valid expression of disapproval, not an over-reaction that steps into the territory of civil disobedience. Equally, the drip-feeding of payments gives the ARC time to ease the impact on ratepayers. At the very least, this should include extending the period for discounted payment.

That will not, however, placate ratepayers. Anger will multiply as the rates demand drops into more letterboxes, culminating in those in Auckland City. That must lead the council to modify the system of charging rates against a capital value (the estimated value of land and buildings) to remove unfair edges. The system is not, as the ARC maintains, simple and equitable.

That might be the thrust of the main cause of the rates increase - the ditching of the differential system by which business rates were double the residential rate or more. But it is not equitable when residents in one part of the region pay higher rates for fewer services, or when no account is taken of the number of people living in a house. How can it be fair when an old-age pensioner living alone, and making little use of ARC services, is expected to pay the same in rates as a family of six in the same street who make full use of those services?

The deputy chairman of the ARC has conceded the increase will impose hardship. A backlash must have been expected. But the ferocity of the reaction appears to have escaped the council, and it seems set in its ways. It cannot be. The regional councillors will have to act quickly if they are to avoid the ultimate penalty at the next election - and if the ARC's standing is to be upheld. Greater fairness must be introduced through a change to the rating basis. Perhaps to that should be added discounts for the likes of sole-occupants and the sick and disabled. If it is too late to make changes now, rebates next year must be pledged.

Direct rating has thrust a timely spotlight onto the ARC. Regional councillors now face greater scrutiny. If they do not address ratepayer concerns, their careers will be short. More worryingly, they will have undermined respect for a body that is pivotal to Auckland's future. That must not happen.