Friday, 22 January 2016

Affordable Auckland’s Rates Revamp

Guest post by Affordable Auckland’s Mayoral & Albany candidate Stephen Berry

Affordable Auckland has announced a revamp of the ticket’s rates policy. We started the campaign with a commitment to keep rates increases below inflation. With inflation levels at historic lows, however, the point is somewhat academic.

Latest figures for price inflation show that annual levels have fallen to just 0.1% in the December quarter, well below the Reserve Bank forecast [i.e., guess – Ed.] of 0.4%. This continues a downward trend, with price inflation below the 1% mark for the last five quarters and at its lowest rate since 1999. In light of this trend, Affordable Auckland candidates believe it is credible to go into the next election pledging to freeze rates at their current level for the next three years.

This pledge is realistic because Affordable Auckland policy is to restrict Council spending to the core services required by the Local Government Act. It doesn’t include corporate welfare. It doesn’t include educational lobbying, and it certainly doesn’t compel the sponsorship of sports tournaments.

If elected, Affordable Auckland candidates will stop paying for warm fuzzies and get on with concentrating on the essentials the city needs to function.

The Local Government (Rating) Act stipulates how rates must be charged by Councils; as a percentage of annual value, capital value or land value. It also states that no more than 30% of council rates revenue can be raised by targeted rates or a uniform annual general charge. While the Auckland market has temporarily slowed, the fundamentals causing rampant price increases have not been fixed. So unfortunately, even if the council freezes the level that it charges on properties, growing property values can still see an increase in the money amount Aucklanders are paying. 

To truly control rates we need remove the council-created market distortions that are artificially inflating Auckland house prices.


Stephen Berry is Affordable Auckland’s Mayoral & Albany candidate
He placed third in the last mayoral election.

2 comments:

  1. So much of what the council does should be answered by the question "why do it at all?" rather than "how could it be done more efficiently?"

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