18 November. What can be done about massive rate increases?
Under current law, rates are based on either a property’s capital value (CV) or land value (LV). In Auckland, CVs apply. This means your rates depend on your property’s value relative to others across the city. This is how the rating system has worked for years. This year thousands of CBD properties saw their CVs fall, but areas like Rodney — where CVs held steady, dropped less, or even rose — were left carrying a greater share of the total rates bill.
Rates remain a form of wealth tax in disguise: they are based on what your home is worth, not on the Council services you actually use.
To rein in rate increases Mayor Wayne Brown has cut $418 million of “fat” out of Council over the last three years. Also the coalition Government has introduced the Local Government Amendment Bill. It redefines the purpose of councils and refocuses them on core services such as roads, water, waste management, public transport, civil defence, and community facilities. It removes Labour’s requirement for councils to spend rates the “four well-beings” – social, economic, environmental, and cultural.
The Government has also hinted that future tools — including a cap or “rate peg” — may follow.
Auckland’s financial pressures are, however, ongoing driven primarily by historic under-investment, the need to build for ongoing population growth, and rising construction costs. Rather than rate increases, options such as a regional accommodation levy, congestion charging, GST back from the rates paid, and increasing the Uniform Annual General Charge (UAGC) should be considered.
Finally, I have also called for an Independent Service and Performance Auditor to be appointed to Auckland Council. This “independent watchdog” would protect ratepayers’ interests with the authority to investigate, and publicly report on, Council performance at any level of the organisation.