Auckland Council budget: Ratepayers face 5 per cent one-off rates boost

Tuesday, 1 December 2020

Participants in a rally and march down Auckland's Queen St call for action on climate change. (Video published May 2019)

Aucklanders face a higher-than-planned hike of 5 per cent in their rates bills to help plug a $1 billion fall in council revenue over the next four years.

The one-off boost, up from a planned 3.5 per cent increase, will add $36 to the rates bill of an average value home before annual increases return to the previous path of 3.5 per cent rises.

The measure is in a proposal released on Tuesday by Mayor Phil Goff as part of the update of Auckland Council’s 10-year budget, which kicks in next July.

Other strategies including locking in $90 million of cost cutting being found this year, making sure the savings remain permanent over the three years.

* Covid-19: Auckland Council revenue slump could hit $1 billion over four years

* Thousands of Auckland properties face 35 per cent rates rise in council cash-raising plan

Discussion about a targeted rate to fund climate change mitigation has not produced any extra funding initiatives.

“Without a suite of measures to counter the $1b financial hole caused by Covid, our city will go backwards,” Goff said.

Up to 600 electric or hydrogen buses will bought by 2030 to replace diesels, under the proposed council budget.

Goff said the revenue boost would allow capital spending to continue at $31b a year, compared with the $26b foreseen in the previous version of the 10-year budget.

The council had looked at a $36 per ratepayer targeted rate to fund climate change action, but instead went for a higher rise in general rates, of a similar scale.

The chair of the environment and climate change committee, Richard Hills, said councillors wanted to make climate change part of “business as usual.”

Mayor Phil Goff says the revenue boost would allow the Auckland Council’s capital spending to continue at $31 billion a year.

There is an additional $150m proposed, across a decade, for climate change measures such as ending the purchase of new diesel buses, and having nearly half of the 1360-bus fleet zero-emission vehicles by 2030.

While the extra 1.5 per cent rate rise is a one-off, the higher level of payment becomes permanent, delivering an extra $25m cash a year, and enabling additional borrowing of around $72m a year.

In keeping with the annual “branding” of council budgets Goff is calling this one the Recovery Budget, delivering key services, maintaining and replacing assets, and building new infrastructure.

Other increased charges still in the pipeline are a likely higher-than-normal increase in water charges, set by council subsidiary Watercare.

Goff would not reveal how high those might be, and said while Watercare had told him where their thinking was going, the decision was their's and he would not indulge in speculation.

The mayor said he had not been given any indication of the level of increase to passenger transport fares, which Auckland Transport’s board was considering on Tuesday.

A strong level of continued investment in infrastructure had been made possible by raising the level borrowing higher than thresholds the council had imposed in the past.

The proportion of debt to council revenue is normally set at 270 per cent, but for three years will run at 290 per cent, funding an additional $450m of infrastructure investment.

A new target had been to lift the proceeds from the sale of surplus property to $70m a year, but Goff was adamant the council’s 18 per cent stake in Auckland Airport was not on the asset sale list.