ARC Rates and the Herald
There was a time when local government issues were discussed intelligently in Labour caucuses. In Norman Kirk's day, twenty of our MPs had been councillors; two had been mayors. We understood the relative merits and defects of Land Value, or Capital Value rating, and by the 1980s, differential rating too. No longer, it seems. Recent comments from the Prime Minister and her colleagues about the Auckland Regional Council's rating decisions astonish me.
Because of her government's legislation last year, regional councils are now obliged to send their own rates bills rather than attach them to those from city and district councils. Besides costing ratepayers an extra $4 million this year, the new requirements meant unscrambling seven different rating systems applying in the region. North Shore had bestowed a big benefit on residential ratepayers by making business pay nine times more for the ARC's services. Waitakere City charged business and residential ratepayers the same. So did Franklin. Auckland City levied business more than twice the residential rate, while Manukau 's convoluted rating system defied explanation. Moreover, some councils in the region used Land Value rating, others Capital Value, and one had Annual Rental Value. Under the new act, such variations couldn't be justified. The ARC now applies a uniform system to all its half million ratepayers. After endless consultation and advertising it chose Capital Value for everyone. Since business ratepayers derive no extra benefit from the ARC's activities, they now pay the same rate as any residential ratepayer with a property of similar value.
To complicate matters, much of Auckland has recently been revalued, and there have been spectacular rises in property values, especially on the North Shore. It was immediately clear - and the ARC warned in its briefings of New Zealand Herald journalists (which they usually failed to print) that North Shore homeowners in particular would begin paying their fair share for ARC services. Not only would everyone's rates rise, but they would be significantly higher for some, thanks in large part to government policy.
The king hit, however, has been the huge extra amount which the ARC is obliged to collect this year. The extra $22 million for urban transport was decided mostly by other bodies who pass their bills to the ARC. The City Council's beautiful white elephant, called Britomart, is a hand-me-down from mayor Christine Fletcher, who Labour unsuccessfully supported at the last election. Some of its costs, and the rolling stock and the stations, have to be funded by the region, thanks to this Government's preference for buses and trains over roading. To be fair, the ARC excluded those areas that didn't get much public transport from the levy. When implemented, bills for central government's new rating system were always going to impact most on North Shore ratepayers and others with big revaluations. Some million- dollar property owners have small incomes. They now demand help.
Helen Clark, it seems, wants to assist, despite carefully targeted relief already available to the genuinely needy. I couldn't believe my eyes when she accused the ARC of lighting a "bonfire", and saying that the council should have "phased in" their new system. She wants the ARC to raise more money for Auckland transport, but appears to want her constituents in Mt Albert, and those of her colleagues in Auckland Central, Te Atatu and elsewhere, to pay a larger share of ARC rates while North Shore's impoverished millionaires pay at a lower rate. That Helen Clark should want solo mums in Sandringham or pensioners in Te Atatu to subsidise North Shore's biggest ratepayers, suggests a strange, new, Labour philosophy. Her solution would also entail a special business levy where none previously existed in west Auckland. Many of her voters, and those of her Minister of Local Government, depend on western businesses for their jobs. Did she take advice before giving tongue?
The biggest casualty of Auckland's rates ruckus has been the Herald's credibility. Its apparently lazy and opiniated local body reporters received careful briefings and quality ARC news releases over a 12 month period, but didn't understand them. Instead, they smugly paraded their ignorance and gave space to bogus claims about GST tax deductibility on business rates. While the Herald tries to inflame readers with "rates revolt" stories (despite their best efforts only "rent-a-crowd" attended last week's ARC meeting), the public, unfortunately, flies blind. So, it seems, do our parliamentarians. Oh for a bit more local government savvy in influential places!