Aucklanders face five per cent rates hike next year as Goff releases final budget proposal

Aucklanders are looking at a one-off rates rise of 5 per cent in the next year as the council looks for billions to help pay for the Covid-19 recovery. 

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Mayor Phil Goff says there’ll be a five per cent rates increase in 2022. Source: 1 NEWS

New spending has also been allocated for big infrastructure, transport and climate change projects. 

Following public consultation, Mayor Phil Goff released his final mayoral proposal for the council’s budget to 2031 today.

It confirmed a raise in the average general rates by 5 per cent for the 2021 financial year. That represents a rate hike of about $147 a year on average per household. 

Goff said in his proposal he did not want to “impose austerity in response to the Covid-19 recession”. 

Instead, he said the city had “faced up to the challenge of making difficult decisions” about what it valued the most and what needed to be prioritised for funding. 

He called it a “recovery budget”. 

“Without the 5 per cent increase in average general rates next year, we would not be able to bring forward hundreds of millions of dollars of capital investment that was delayed by revenue reduction caused by Covid-19,” Goff said.

“In our Colmar Brunton survey of more than 4000 Aucklanders which was part of our consultation process, the budget measures were supported by 46 per cent of Aucklanders and not supported by 37 per cent. 

“It is unusual for people to support increased rates but I think they were aware of the impact of Covid-19 on our finances and the fact that other growth cities in New Zealand were putting up much greater increases, some in double figures.”

Auckland Mayor Phil Goff (file photo). Source: 1 NEWS

Goff said he wanted to return to a 3.5 per cent rates increase per year for the financial year, starting 2022 to 2030. 

The rates bump would see the council maintain its $31 billion spending programme on infrastructure. This is up from $26 billion set aside in the 2018 10-year budget, with spending increases proposed for transport, water and parks.

Of the increased spending, there would be a $4 billion boost for water, wastewater and stormwater infrastructure. About $900 million more would also be allocated for parks and community facilities.

Auckland Council today also proposed a further $152 million be added over 10 years to reduce greenhouse gas emissions.

Some of the additional money will be allocated to Auckland Transport to promote people shifting to public transport and reduce its transport emissions. There is also further investment in research, recycling centres and turning Queen Street into a zero emissions zone.

Sales of "surplus properties" and an extended period of high borrowing are still also on the cards for Auckland Council. About $191 million worth of Auckland Council properties have so far been approved for sale. 

Auckland Council also temporarily allowed itself to borrow up to 290 per cent earlier this year in response to Covid-19 and Auckland’s drought. 

It follows on from July 2020’s emergency budget, which raised overall rates by 3.5 per cent to help plug the $1 billion in lost revenue over the next three years caused by the Covid-19 pandemic. 

Most submitters to the council’s consultation for the emergency budget last year said they preferred a rates increase of 2.5 per cent or less. Only 28 per cent opted for a 3.5 per cent rates increase, and 25 per cent wanted a zero increase.

For this proposal, Goff said council looked at both its own consultation and the findings from the Colmar Brunton survey it commissioned.

Goff’s full proposal is available on the council’s website.