Editorial: Flaky ARC flip-flops over rates

Local Body elections cannot come soon enough for Auckland this year. Citizens are now paying rates directly to an Auckland Regional Council that is about to regain some of its old authority over regional services and there are serious doubts that sufficient members of the present council are up to the job.

Those doubts are deepened by the ARC's latest decision - a u-turn on last year's decision to rate business and residential properties on the same basis. The earlier decision was right. It was a reason that first ARC rates demand nearly caused a rates revolt, but not the only reason. The ARC was seeking far more money than it had previously levied through city and district councils, mainly to finance an upgraded urban rail and bus system. It was the first time ratepayers had been confronted with the cost of that project and the outcry was greatest in areas the railway does not reach.

The clamour died away, as these things do when enough council members stand firm for what they regard as the greater good. But now, long after the council has weathered the storm, it has suddenly reversed itself on the issue of a business rate. The council is so small - 13 seats - that one flaky member can make a difference. It has now adopted a business differential by a vote of 7-6, with North Shore member Ian Bradley reversing his original position.

It is easy for politicians to court cheap public favour by loading the costs of their decisions onto business. Small business owners are not numerous - more is the pity for the economy - and far outweighed by the votes of residential ratepayers. But politicians who impose a disproportionate share of the costs of local government on commercial ratepayers are treating the voters as fools. Because commercial ratepayers will recover the cost from local consumers if they can, or cut back their operations if they cannot recover the cost. Either way, the community suffers for the sake of a few council members' shortsighted populism.

Fair rates should broadly reflect the cost of the council's services. Rates based on property values have an inbuilt redistributive element since higher valued areas pay more for the same services. Commercially zoned property has a value that reflects its use, and direct charges for extra rubbish collections and the like cover any additional demands they make on the community. There is no good case for a higher base rate as well.

The ARC's about-turn now does it more discredit than anything it had previously decided. Whatever a voter's view of the business differential, it is hard to retain much regard for a council that flip-flops as this one has done. If it is flaky on this issue, what sort of decisions can it be making on matters that attract less public attention? This is the body that is about to be given greater sway over the region's roading finance and overall control of its public transport services. The coming election is a chance to equip the council for the task. The region needs representatives with the common sense to make the right decision and stick to it.