Auckland Mayor Wayne Brown calls for Govt to pay $415m rates bill

Wednesday, 27 March 2024

Auckland Mayor Wayne Brown said central government should pay rates like everyone else.

Auckland Mayor Wayne Browns reckons that if Aucklanders have to pay rates, central government should too.
He has called on the government to return $415.3m worth of GST on rates to Auckland Council.
Minister of Local Government Simeon Brown has responded by announcing that the Government has a long-standing policy of not paying rates.

Minister of Local Government Simeon Brown says the Government is not prepared to pay rates to Auckland, and they won’t be changing a long-standing rates exemptions for central government buildings.

This comes after Auckland Mayor Wayne Brown called on the Government to cough up almost half a billion dollars, which would otherwise be in the council’s pocket.

He has formally requested the Government pay rates on its buildings in Auckland, reform laws regarding non-rateable land, pay Auckland Council the revenue equivalent to the GST charged on council rates and provide a share of the portion of GST collection on newly built homes.

GST on rates for the 2023-2024 financial year was estimated to be $415.3m.

“If that money was returned to Aucklanders, it would enable rates to be 15% lower,” Mayor Brown said, elaborating that households would get a 7.5% reduction in rates for the next financial year, rather than the 7.5% increase proposed in the Long-term Plan, currently out for public consultation.

How are council rates calculated?

“Why should central government get a free ride? They use our infrastructure but don’t pay the bill.”

The Government wasn’t budging, and in a statement provided to Stuff, Minister Brown said It had been a long-standing policy to exempt buildings such as schools and hospitals from rates.

Brown added that local government, like central government, had a responsibility to find savings and in doing so prioritise what he called “must haves” instead of “nice to haves”.

The minister said his focus was on developing a framework for city and regional deals between central and local government, and that this was the best way to deliver infrastructure for the future.

The mayor said Aucklanders were not getting a fair deal, with the region missing out on $36 million of annual income.

He believed that Auckland households could save an average of $506.40 in the 2024-2025 financial year should the money be returned to Aucklanders.

Mayor Brown said it was “odd” that Auckland International Airport not pay rates on its land, worth millions.

Properties such as airports, port land, other transport use land, wharves, jetties and churches which are exempt from rate payments as per the Local Government (Rating) Act 2002.

Brown said old laws such as this one gave private enterprises a free ride when Aucklanders were struggling to make ends meet.

“It seems odd to me, that a multi-billion dollar listed company such as Auckland International Airport Limited is sitting on hundreds of millions of dollars’ worth of non-rateable land, when everyday Aucklanders are doing it tough.”

“Aucklanders are being shortchanged. We put more into Treasury's coffers than we get in return. We want a fair share of the revenue Auckland generates, and in this instance the government is smart enough to recognise this. I'm looking forward to the discussions here.”

Mayor Brown compared the size and scope of Auckland - which homes a third of New Zealand’s population - to a state government in Australia.

“Australian states receive 45% of their revenue through transfers from the federal government; Auckland Council receives a paltry 12%. No wonder we can’t keep up.”

The mayor also believed it was unfair that the council doesn’t receive any of the GST collected on new builds.

“We have to foot the bill for the infrastructure and other amenities needed for new builds, yet the money goes to Wellington? I’m also looking-forward to the conversations here.”