ARC's Rates Risk Public Transit

I am taking back all the good things that I have been saying about the Auckland Regional Council. At least, this Auckland Regional Council. They may just manage to set back the development of a comprehensive public transit network for another hundred years.

The simple truth is that the ARC is blaming the increase in rates on the growing costs of public transport, when in fact the new rates represent a victory of the region’s business elite at the expense of residential ratepayers. The new ARC rates aren’t just regressive taxation; they are a massive subsidy to the corporate sector paid for by you and me. And ARC is using long awaited increases in transport costs as a cover for a profound redistribution of wealth in favour of the wealthy.

In the rest of the world, rates are calculated differently for business and residential properties. Why? Because most jurisdictions realize that people who derive profit from property should pay more than people who simply live in a house. It is similar to the principle of progressive taxation; the wealthy should pay more tax than the poor.

ARC, under pressure from the Auckland Regional Chamber of Commerce managed to overturn this principle. In a submission to ARC’s draft annual plan for 2003/4, the Chamber asked ARC to “imagine a region where business is welcomed”. ARC has done more than just imagine. They have done away with differentials for business and eliminated special rates for rural properties.

Michael Barnett, Chief Executive of the Chamber and an ARC Councillor authored the submission. Without a blush, he attacked the idea of using rates to fund infrastructure by asking ARC to consider “whether it is fair that ratepayers should be expected to pay for services most won’t use, at least in the short-term.” He argued instead for a user-pay system. If you aren’t a member of the Chamber, you pay.

The supposition is that business neither uses public transit, nor derives any benefit from it. And yet, in another Chamber submission to Infrastructure Auckland, Barnett complained that the costs to Auckland’s economy as a result of congestion were in excess of $1 billion a year. In fact, he asked, why not speed up the programme of public transport spending?

It should concern everyone in the Auckland region that ARC has managed to introduce a regressive rating scheme that subsidises businesses and corporations. But the fact that they have used transport costs as a cover for these increases in a city with already fragile political support for a comprehensive public transport system is an outrage. The public reaction against the rates increase could result in a backlash against any further development of Auckland's inadequate transport system.

We may find that Auckland could have to wait another hundred years for a modern, integrated transit system.

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