Auckland rates jiggery pokery

Auckland ratepayers could excused for being bamboozled by their rates and taxes and levies.

Mayor Phil Goff is claiming he is fulfilling a promise to keep rates rises below 2.5%.

RNZ: Auckland ratepayers could face 6.2 percent hike

Mayor Phil Goff has unveiled an ambitious mix of new rates, revenue-shifting and even council asset sales to boost the spending on critical infrastructure.

Mr Goff has defended the proposed changes as being in line with his election pledge of keeping general rates rises at 2.5 percent.

“It’s exactly what I promised – I said to people right across the community I want to get rid of the interim transport levy that’s costing everybody regardless of how often you use the roads, and replace it with a regional fuel tax,” he said.

The rating cake has new layers, built on a basic general rate rise of 2.5 percent, as Mr Goff pledged in his election campaign. The 2.5 percent is proposed only for the next two years, then rises to 3.5 percent.

But it is not that simple.

An additional 2.8 percent would come in a water quality targeted rate, aimed at accelerating significantly some big infrastructure projects to clean waterways and beaches.

Another 0.9 percent is added by a natural environment levy to deal with threats such as kauri dieback, possums and weed infestations.

Those rises are partly offset by ending, as scheduled, the Interim Transport Levy of $114 on households and $183 on business.

For an average priced home around $1 million this will slice 4.8 percent off the higher rates, leaving an overall increase of 1.4 percent.

That percentage increase will rise progressively for homes valued higher than $1m, and decrease for cheaper homes.

However, that levy will then be replaced by a 10 cent-a-litre regional fuel tax, which the government has told RNZ should be in place in time for the council’s next budget mid-2018.

It seems that few if any ratepayers will pay less, or less than 2.5%, and some will pay disproportionately more.

An additional variable is the impact of recent property revaluations, which affect how big a share of the city’s rates burden is apportioned to each property.

Many lower-priced suburbs in the west and south already face higher than average rates rises because of that process, and extra costs could be imposed via the proposed 6.2 percent increase, and the cost of the fuel tax, if they cover high mileage.

There will be ‘consultation’:

Aucklanders will be asked their views during consultation early next year on the budget, but will struggle to get a clear picture of how they are directly affected.

It looks likely many will struggle to understand the convoluted changes, and some may have real trouble paying for the increases.

Just as well everyone will get tax relief which is legislated to take effect from next April – oh, hang on, the Government are scrapping that.