KEY POINTS:
Auckland City Mayor Dick Hubbard said a review of rates released today vindicated his council.
His claim came after councils were told by the Local Government Rates Inquiry to rein in spending and make better decisions.
The long-awaited report said rates will become unsustainable in a decade if things continue as they have been.
But Mr Hubbard said the council's rates rises have been 38 per cent over the last ten years - in line with the national average quoted in the report.
He called for all the report's recommendations to be implemented and said the suggestion that rates be charged on government land including hospitals, schools and universities could mean an extra $25 million.
This roughly translated to 6 per cent of rates, he said.
He said the review "backs up the policies weve introduced over the past three years".
However, NoMoreRates campaigner David Thornton said the report's findings firmly point the finger at councils.
He said core services, such as water, needed to be separated from "discretionary" spending on things like libraries.
Councils needed to consult on "what they're spending money on and also, can they afford to do that. They must talk to their community," Mr Thornton said.
"At the moment an elderly couple living next door to a family of five incomes pays the same amount of rates if their properties are worth the same amount," he said.
The report said rates increased by 38 per cent in the 12 years to this year with forecast increases of 8 per cent for the next few years reducing to increases of 4 per cent by the end of the 10-year period.
It thought these estimates conservative.
The report said councils must rein in spending and make better decisions on affordability of their plans.
It recommended central government provide some funding to keep rates levels sustainable, improve affordability through rates rebates and other support, change laws to make the rating system simpler, and improve coordination with local government.
Rates should remain the major source of local government revenue and there was no need for a new tax or a rates cap, it said.
"There is no need for any magic bullet to fix the problem and indeed there is no such bullet available," the report panel said.
The report made 96 recommendations and highlighted problems in spending and funding decisions around services.
It was the end product of the Local Government Rates Inquiry commissioned by Local Government Minister Mark Burton last November to address public concerns over rates rises and conducted by David Shand, Graeme Horsley and Christine Cheyne.
Setting up an inquiry helped the Government defeat Act leader Rodney Hide's bill proposing a cap on rates rises be set.
His bill to cap rates floundered after it did not receive support from Labour and New Zealand First.
Mr Hide said the report is a waste of time and money.
"This is what politicians do now. When there are tough issues, they run away and commission a report with taxpayers' money and hope the problem will go away," he said.
He said the report's finding - that there is no magic bullet to curb rates - is wrong. He said councils' spending needs to be capped in real terms and politicians should seek ratepayers' views via a referendum if they want to spend more.
When asked if this would cost more, Mr Hide said it would.
"But it would save ratepayers a fortune because the increases can't be justified. Councils wouldn't try it on," Mr Hide said.
Mayor Hubbard said he was pleased that the report addressed the anomalies surrounding Maori land.
"It has always been an anomaly to us - to value Maori land with Pakeha values when it can't be sold," Mr Hubbard said.
He said his major disappointment was the decision not to remove GST from rates.
"Ideologically and philosophically, we're opposed to that," Mr Hubbard said.
Rates were 56 per cent of local authority operating revenues expected to go up to 60 per cent by 2016.
- with NZPA
Read the report:
Executive Summary
Full report
