1 Dec 2020

Auckland Council considers 5% rates hike for 2021

5:30 pm on 1 December 2020

Auckland Council is proposing a one-off 5 percent rates increase next year as part of its Covid-19 recovery plan.

Auckland mayor Phil Goff speaks to media following Cabinet's extension of the alert level 3 lockdown.

Auckland Mayor Phil Goff says now is not the time to cut back on fixing the city's infrastructure. Photo: RNZ / Dan Cook

The council expects to lose $1 billion in revenue, due to the impact of the coronavirus pandemic, over the next four years.

Mayor Phil Goff released the plans in the council's proposed 10-year budget today.

The 5 percent rise would amount to an extra $36 for properties worth $1 million on top of the 3.5 percent increase, it said, and is more than the anticipated 3.5 percent rise which would kick in the following year.

The average Auckland household will pay more than $100 extra in rates next year if the proposed budget gets the tick.

"Without a suite of measures to counter the $1bn financial hole caused by Covid, our city will go backwards," Goff said.

"We don't want a city full of potholes and unkempt parks, so we need to take more urgent action now.

"If we stuck with 3.5 percent then there are a whole range of projects that would not have been able to have been completed."

He said the rates rise would allow the council to maintain a spend of $31bn in its capital infrastructure programme.

"While not all Aucklanders will be thrilled with a one-off rates bump of $36, it is a one-off measure that amounts to less than 70 cents a week for the average property. This increase will allow us to do more in transport infrastructure including addressing road safety, further drought-proof our city, continuing our response to climate change, protect our kauri trees and maintain our parks and sports fields," Goff said.

"Now is not the time to cut back on fixing our city's infrastructure. We have been catching up on decades of underinvestment through our previous 10-year budget and were making significant progress on our infrastructure deficit. We cannot allow that momentum to be wasted."

He said the recovery budget prioritises Auckland's recovery from Covid-19, maintaining and renewing community assets, and protecting the environment and responding to climate change.

"This not a slash and burn budget but it's also not the budget we had hoped to put out at the start of the year. We have to accept that Covid has changed our financial landscape and change our plans accordingly."

For transport, Goff said some urban cycleways would have ground to a halt and there would be the pressure of providing transport infrastructure for new housing development.

"When we weighed all of those things up there was a huge cost there in simply having the 3.5 percent unaltered."

"I weighed up what the cost of that policy would be in terms of maintaining services, building the assets we needed to and stimulating economic recovery and I believe that a one-off increase of 5 percent ... was worthwhile."

A visit to Māngere's Friesian Drive showed recently-constructed cycle ways being used for off-street parking.

A cycle way on Māngere's Friesian Drive being used for off-street parking. Photo: LDR / Nick Truebridge

Council tightened its belt this year, making $90m in savings which will be locked in.

It also plans to sell surplus properties to return $70m a year over the next three years to invest in the city's critical infrastructure needs.

Its borrowing will temporarily rise to a higher ratio of up to 290 percent for the first three years, gradually returning to 270 percent.

The proposed budget also outlines council's planned measures in the areas of climate action, transport, infrastructure and community services and facilities.

Public consultation on Auckland Council's proposed long term recovery budget starts in February.

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