Ratepayers cry foul over cut to early payer discount

File photo / Supplied

Auckland Council's "transition" rates bill rise of 4.9 per cent will be higher for thousands of householders in the region who pay their rates in full on the day they are due.

Their former councils rewarded them with an early-payer discount.

But the Super City's councillors want to prune the discount amount - in the interests of treating all the region's ratepayers the same and simplifying administration of 500,000 rates bills.

Before the November 1 merger, five of the eight former councils encouraged ratepayers to write out a cheque for their rates in full by the date the first instalment was due.

Giving discounts last year were Auckland City Council (1.13 per cent), Manukau City Council (2 per cent), Papakura District Council (5 per cent) Rodney District Council (5 per cent) and Auckland Regional Council (2.5 per cent).

North Shore City Council, Franklin District Council and Waitakere City Council gave none.

The Auckland Council proposes an early-payment discount of 1.5 per cent for the 2011-2012 year.

Rates will also be able to be paid in four instalments without any discount.

Council treasury officials say that amount will not cost the council anything. It comes from savings in loan interest costs, a more certain cash flow and fewer rates invoices to print.

But the effect of a trimmed discount on some ratepayers came to light yesterday at the Rodney Local Board area's annual plan hearings.

"The early payment of rates discount as proposed - a reduction from Rodney's 5 per cent to 1.5 per cent - is a 3.5 per cent loss for me," said retired Helensville farmer Dennis Shepherd.

"This adds 3.5 per cent to the 4.9 per cent rates rise."

Mr Shepherd said his current rates bill was $3500.

"I like to pay upfront because it gets rid of it for the year.

"But they are just being miserable. They reckon they can borrow at 4 per cent and are not going to give the plebs any more than 1.5 per cent. Well, nobody is going to pay upfront for that."

A deputation from the Mahurangi East Residents and Ratepayers Association also called for the 5 per cent discount to be retain.

Chairman Geoff Johnston said: "Our rates rise will go to 8.74 per cent, which is quite different to what Mayor Len Brown has been saying.

"The council says a 1.5 per cent discount is cost-neutral. But we dispute that strongly. And for those not so well off, a 5 per cent [discount] gave an opportunity to pay in one fell swoop and get a saving."

The council says it will review the discount each year.

Late payers will be charged a 10 per cent penalty, to discourage people from "using the council as a bank".

Most of the region's rates bills were paid in four instalments. It cost $1 to print and process each rates bill. Every 1 per cent change in interest rates changes the council's debt-servicing costs by $30 million.

The council ruled out following the lead of some businesses which give a "prompt payment" discount of 10 per cent. Giving a 10 per cent discount equated to a rates rise of 11 per cent, on top of the increase needed, it said.

The council budget calls for general rates revenue of $1.4 billion.

PROMPT PAYMENTS

LAST YEAR
1.13pc Auckland City Counci
l2pc Manukau City Council
5pc Papakura District Council, Rodney District Counci
l2.5 pcAuckland Regional Council
0 North Shore City Council, Franklin District Council and Waitakere City Council

THIS YEAR
1.5pc Super City council