Coronavirus: Auckland Mayor Phil Goff open on lower rate rise

Friday, 17 April 2020

Auckland's mayor will leave it to residents to decide whether to stick with a proposed 3.5 per cent rate rise, or opt for a lower 2.5 per cent in an emergency round of consultation on the council's budget.

Councillors have decided to possibly delay the annual budget by a month, while it goes back to the public for views on some of the financial responses Auckland Council may take to deal with the financial hit from Covid-19.

Forecasts show the council could lose between $450-650 million in revenue, depending on the severity of the impact, and whether it runs six or 12 months.

Council staff didn't support offering a lower across-the-board increase as an option, but councillors in a five-hour closed-door session decided the public should have a say. 

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* Coronavirus: Why Auckland's rates still need to rise despite Covid-19 outbreak**

Goff campaigned in 2019 on a 3.5 per cent average general rate rise, but won't be drawn on what he now favours.

'I'm not going to go out and tell people what they should vote for, we'll provide all the information that enables those who make submissions, to decide,' Goff told Stuff.

The council has yet to decide when and how an additional round of consultation will occur.

Goff said there would also be an outline of the impact of freezing rates at current levels, which would cost $59m in lost revenue a year, but that will not be offered as an option.

'People (councillors) looked at this and said we would end up cutting to the bone,' said Goff.

'The professional advice was it would have been a dramatic cut in key services that Aucklanders value, and a dramatic cut in what we could invest in to help the stimulation of jobs, and the growth of the economy.'

Goff didn't see a material difference for the council between the two levels, and said for an average ratepayer, the rise would be the difference between $1.83 a week, and $1.35 a week. 

Help for ratepayers struggling with their bills will be different for those dealing with the last quarterly bill for the 2019/20 year due in May, and what would happen in the next financial year from July or August.

For the May quarterly bill, all ratepayers will be able to seek a three-month deferral, if they qualify on hardship grounds.

In the new year, assistance can currently only be offered to residential ratepayers, unless the new round of consultation supports help for qualifying business ratepayers.

Council officials had previously forecast rates relief might run to $30m in the remainder of this year, but now believe it could go as high as $125m.

The controversial $14m rate imposed since 2017 on hotel and motel properties, will be waived for the last quarter of this year, costing $3.3m.

The proposed 9-month extension of suspending the Accommodation Providers' Targeted Rate will depend on the outcome of public consultation, but is expected to go through.

'The board of ATEED have proposed that the APTR and the spending on (major events and tourism promotion) that the APTR funds both be suspended for one year from 1 April 2020,' said the council report.

'Once travel restrictions are lifted, investment in visitor attraction and major events will be key to revitalising the tourism sector, and the APTR would then resume to help fund this investment.'

'I applaud the brave decision by ATEED to give up around a quarter of their yearly budget, because it was the right thing to do,' said Chris Roberts, the chief executive of Tourism Industry Aotearoa, which has strenuously opposed the rate as unfair.

In further Covid-19 related response on Friday, 53 executives across the Auckland Council group volunteered to take pay cuts of 20 per cent at CEO level, to 10 per cent in the second tier.

The chairs of five council agencies will take a 20 per cent cut, directors 10 per cent, and all for a six month period.