Media statement June 5th, 2007

Rates whopper a Shore thing

North Shore City Council’s proposed rate increase for 2007-08 is too high compared to the rate of inflation. But it’s no surprise, looking at the council’s history.

“The proposed 6.9 per cent rise tops off a string of increases that have amounted to the highest in the region for the past eight years, accumulating to a 49.4 per cent increase (with revenue growth and inflation taken into account),” said Peter Atkinson, advocacy executive at the Employers & Manufacturers Association (Northern) (EMA).

“And looking ahead, North Shore’s Long Term Council Community Plan for 10 years to 2015 has rates increasing by a cumulative, excessive 86.5 per cent – the biggest increases in the Auckland region and four other regions of the upper North Island.”

Mr Atkinson’s comments were part of the EMA’s submission to the city’s 2007-08 Draft Annual Plan oral hearing on May 14.

He also said North Shore’s business differential is still very high at 6.56 times the residential rate on property of the same value.

“We have asked for a new independent study into the costs and benefits of the rate to justify the differential, as the Local Government Act requires.

“On the good side, the Uniform Annual General Charge component of the rates bill is set at the maximum of 30 per cent.

“But on the other hand, the council hasn’t changed its rating base from land value to the fairer capital value, after looking at the option.

“We have encouraged them to stop dithering and move ahead with their rating review,” Mr Atkinson said.

The EMA has also asked the council on behalf of its members to advocate to the Auckland Regional Council that metropolitan limits be reviewed for business growth.

“Auckland has used up its industrial and commercial land, apart from what’s held by land bankers, and this is especially prominent on the North Shore.”

Comparison across the regions

Proposed rate increases for 2007-08 in the Auckland region and the rating bases:
Auckland City - 3.6 per cent (annual value)
Manuaku City - 5.9 per cent (annual value)
North Shore City - 6.9 per cent (land value)
Rodney District - 6.3 per cent (land value)
Waitakere City - 6.69 per cent (land value)
Auckland Regional Council - 4.9 per cent (activities/functions based)

Proposed increases in the upper North Island outside Auckland:
Hamilton City - 5.47 per cent
Tauranga - 3.9 per cent
Rotorua - 3.7 per cent
Whangarei - 7 per cent

Media statement June 6th, 2007

High rates for business a turn-off in Waitakere

Waitakere City’s mayor decries the lack of jobs close to home and the daily exodus of half its workforce to other locations.

“So why does the city’s rates bill have the highest business differential among six local councils in the Auckland region and another four regional cities whose businesses are represented by the Employers and Manufacturers Association (Northern) (EMA)?” said the EMA’s advocacy executive, Peter Atkinson.

He presented the EMA’s submission to the city’ 2007-08 Draft Annual Plan oral hearing on May 21st.

Mr Atkinson said, “The city has no independent cost benefit study to justify its variable business differential – for example, 8.49 times the rate for a residential property valued at $500,000.

“They don’t have much business there so they charge a higher differential. But what are they doing to make it attractive for business to locate there?”

In addition, Waitakere City Council’s proposed total rates increase of 6.69 per cent for 2007-08 is at the upper end, comparatively.

“It’s far above the rate of inflation. The council should be seeking to pay for the operating costs of growth through additional rates arising from growth in the rating base, and pay for the capital costs from development contributions and loans rather than adding to the burden on existing ratepayers.”

However, according to the Long Term Council Community Plan for 10 years to 2015, Waitakere’s increases are more in the middle of the field compared with other councils’.

Mr Atkinson said Waitakere is to be congratulated for charging virtually the maximum 30 per cent of the rates bill as a Uniform Annual General Charge.

And Mr Atkinson commended the council for its proposal to change its rating base from land value to the fairer capital value later in the year.

Information withheld while business rates rise

The increased differential rate charge imposed on businesses in Manukau City proposed for this year is disappointing and unnecessary.

So said the Employers and Manufacturers Association (Northern) (EMA) advocacy executive, Peter Atkinson, to the city’s 2007-08 Draft Annual Plan oral hearing in early May.

“The EMA submits that the business differential increase of 1.8 times more than the residential rate is greater than that proposed in the Long Term Council Community Plan (2005-2015),” Mr Atkinson said.

“Business differentials should be abolished altogether over time. There is no justification for them when rates revenue is based on the capital value or annual value of property.” Manukau uses an annual value base.

Mr Atkinson says, furthermore, that the council’s Draft Annual Plan is so lacking in information that consultation is almost impossible.

“There is inadequate explanation on the major changes in costs and asset values compared to the Long Term Community Council Plan,” he said.

“For example, the $3 million increase in costs to complete the Cavendish-Liverpool-Nesdale road connection this year – discovered by EMA’s investigation - needs to be quantified and reported in the Draft Annual Plan.

“The Plan mentions a saving in rates to ratepayers due to the change to annual value but the amount is nowhere to be found.

“The Plan also raised the EMA’s hackles when the chief executive refered to a likely increase in water prices after June 30th, to be decided by the end of June between council and its council controlled organisation Manukau Water Ltd.

“Council’s intent as far as prices are concerned should have been covered in the Draft Annual Plan so the public could have input.

“But the EMA congratulates Manukau City Council for maintaining the level of uniform charges (about 26 percent of the rates bill) at close to their allowable maximum of 30 per cent.

“The proposed total rates increase of 5.9 per cent this year (2007-08) is considerably less than the 8.04 per cent increase forecast in the long term plan.

“But it should have been no more than the rate of inflation (2.98 per cent a year on average for the past three years).

“Local and central government and other monopolies are causing most of the inflation in New Zealand, which has caused us to have the second highest interest rates in the developed world, and a grossly overvalued New Zealand dollar.

“This is hurting exporters and the New Zealand economy.”

Manukau’s 10-year plan projects a 64.1 per cent cumulative increase in rates rises by 2015 – moderate by regional standards, eg, North Shore’s cumulative increases will reach 86.5 per cent, but Rotorua’s, 36.1 per cent.

ends

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