Viewpoint – Beware election-time rants on rates

We’re about to enter Auckland Council’s Annual Budget consultation process, and this brings the often passionate debate about what the level of rates should be. Because this is an election year, you can expect the debate to be slightly sharper. This often leads to short, snappy, headline-grabbing statements where complex issues are condensed down to one line of text and difficult decisions are presented as simple binary ones.

Remember Boris’s Brexit Bus? It proclaimed that the UK was sending £350 million to the EU each week, and this could be used to fund their health system, the NHS. This was a great political stunt. Unfortunately, it wasn’t entirely correct or what has happened post-Brexit.

We have a similar annual debate about rates. Some say there should be a zero per cent increase, some say rates need to be higher. Many politicians make firm political promises about what level of rates they will or won’t support.

These promises are often made without knowing the financial position the Council will be in when the decisions need to be made. This is against a backdrop of no ratepayer being happy to have annual increases for a variety or perfectly legitimate reasons.

So, we find ourselves in a challenging situation. By now, everyone will know that Council faces significant challenges with its budget due to Covid-19. But in a way, our current situation may be one that was going to happen anyway. For years, Council staff have been quietly pointing out to politicians that there needs to be more money invested in repairs, maintenance and renewals of our existing assets – from roads to community halls and libraries. We can only go on sweating assets for so long before we start seeing serious issues with some of our key infrastructure.

We also have been cutting spending to keep within the Covid-19 driven constraints on our budgets and this is proposed to continue for the coming year. This means there are now fewer staff in key areas such as compliance, planning and consenting. The effects of this can now be seen, and this is not a great outcome for our community.

While Council must constantly be looking to work more efficiently and give value for money to ratepayers, increasingly elusive cost savings are a drop in the bucket to accomplish what is needed.

Adding to this problem is our rapidly growing population, which is tipped to hit 2 million residents in about eight years. We are not investing enough each year in new facilities, parks and transport infrastructure to meet demand.

Every time Council has approved a Regional Land Transport Plan, the list of unfunded projects increases. The value of these projects is now billions of dollars.

Putting off spending in these areas of our core business comes at a cost. Not only are the assets we have slowly worsening, some need to be replaced and some likely expanded and improved to meet the needs of more residents.

As seductive as the low or zero rates message may be, there will, inevitably, be a reckoning. Councillors and local boards have warned for years about the consequences of delaying the hard decisions around the required levels of investment. We will all ultimately end up having to pay for this, either with significant rates increases or through general taxes to government if they need to come in and bail out Council.