Bigger the council, bigger the rates bill

Auckland homeowners have some of the biggest rates bills in the country.

New data from Statistics NZ shows there is large variation around New Zealand in what households pay in rates.

In the Auckland region, the mean annual rates bill is $3620, and in Wellington $3080.

In the rest of the North Island, it is $2590.

In Canterbury, ratepayers pay a mean $2650 a year and in the rest of the South Island, $2550.

Across the country, people were paying an average $53.10 a week in rates, Stats NZ said.

That includes variables such as water, which in some areas is billed separately from the main rates bill.

Massey University senior lecturer in the school of management Andy Asquith said there would be other differences such as the level of service that councils wanted to provide.

‘‘Different places have different needs, different costs and different priorities. It’s complicated but it’s also very simple. We’ll always have different rates.’’

Asquith’s colleague, associate professor Christine Cheyne, warned that making comparisons between councils was difficult.

She said rates were linked to council activity in each region and each council had different rating tools.

Some had targeted rates and each would have different infrastructure requirements.

As part of the coalition agreement between Labour and NZ First, the Government has agreed on a public inquiry to investigate the drivers of local government costs and its revenue base.

It marks a decade since the Shand report called for more money from central government for councils, and for councils to take control of rates increases with better systems and processes.

That inquiry said bills could drop 10 per cent if local authorities took on more longterm debt, and stopped using cash to fund depreciation.

Asquith said that had the report’s recommendations been legislated on and councils compelled to follow them, finance for local governments would no longer be an issue.

‘‘It has the potential to be mind-blowing.

‘‘The issues are still there – if anything they’ve got worse. We’ve spent 10 years twiddling our thumbs.’’

He said many councils were not using best practice.

‘‘Things that could be done are not being done, they’re not using the techniques and tools available.

‘‘For me, the first thing to do is get everyone on a level playing field and put in place a standard operating regime.’’

Too many small councils did not have the resources they needed, he said.

Better systems would help them to make better use of the rates money they received.

Asquith said a more equitable approach could be an income tax rather than property-based rates.

But he said that could mean the burden fell too heavily on salary-earners.

Mean household expenditure on rates:

❚ Auckland region: $3620

❚ Wellington region: $3080

❚ Rest of North Island: $2590

❚ Canterbury region: $2650

❚ Rest of South Island: $2550 Year ended June 30. Source: Stats NZ

"Different places have different needs, different costs and different priorities. It's complicated but it's also very simple.'' Massey University senior lecturer in the school of management Andy Asquith