Tuesday, June 5th, 2007

Auckland should hold off on development contribution cost hike

Business want to see changes to Auckland City's development contributions policy put on hold until a working party, including stakeholders, has had the chance to look at how it complies with the Local Government Act and the issues raised by the High Court on the subject.

The message was delivered by the Employers & Manufacturers Association (Northern) to the council hearings on the city's Annual Plan today.

The council is proposing to increase the city's development levies by 500 per cent.

"While we acknowledge the Council is seeking to meet the requirements of the Act, the impact of such a major cost increase has not been considered with sufficient care," said Alasdair Thompson, EMA's chief executive.

"The impact must be taken into account under Section 101.3(b) of the Local Government Act 2002.

"The extra cost of the levy would add $33,000 to the cost of a development contribution for a residential dwelling, from $7000 last year to $40,000 later this year. It's even harsher on central city residential and commercial property developments.

"If property cost increases like this continue we will lose the ability to attract the skilled people who come here for lifestyle advantages more than for the pay.

"Instead, more will go to Australia where the pay is 30 per cent higher than here.

"New Zealand's competitiveness is at stake.

"But we acknowledge extra money is needed to fund the AMETI project (the eastern transport corridor development).

"The current proposal would also require residential housing to bear the larger part of the cost thereby cross subsidizing other property owners."

On the most effective governance structure for Auckland Mr Thompson said he found it disconcerting that Aucklanders and other major stakeholders had not been consulted before the region's local government representatives took their minimalist proposals for change to central government.

"The Government did not consult anyone else on the best governance structure for Auckland either, other than local government," Mr Thompson said.

"But we suspect the Government's position to be announced next month will be the same as the local government view.

"EMA has 2055 member businesses in Auckland City which together employ 134,200 staff with a combined payroll of $5.5 billion."

ENDS

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