Explained: Auckland Council's proposed rates increase

Under the Auckland Council 10-year budget presented on December 1, Auckland Council is proposing a one-off, 5 percent rates increase from July 1, 2021. 

It was initially understood the 5 percent rise would cost ratepayers an extra $36 per year, on average. But presentation of the increase as a "one-off rates bump of $36" sparked criticism from Auckland Ratepayers' Alliance. Referring to the presentation as "totally misleading", campaign manager Monique Poirier told Newshub the $36 only relates to the increased portion above the annual 3.5 percent increase. Ratepayers would be paying an extra $120, Poirier said.

As rates are a significant expense for homeowners, Newshub asked Auckland Mayor Phil Goff to confirm which portion of the rates bill the average extra cost of $36 per year relates to.

On Wednesday, Goff confirmed the $36 relates to 1.5 percent of the proposed general rate increase - not the full 5 percent.

He also confirmed the proposed budget includes a 1.2 percent "inflation adjustment" to the targeted rate for waste management. Targeted rates are a separate component of the property rates assessment.

Auckland Council proposed general rate increase: 5 percent

  • 3.5 percent annual rate increase. The average increase isn't confirmed.
  • 1.5 percent one-off rate increase. An extra $36 per year (on average).

Total one-off rates increase (2021-2022): 5 percent.

"The 1.5 percent, which represents around $36 per year on the average rates bill, is on top of the long-term 3.5 percent per annum increase," Goff confirmed.

"I'm proposing [to] retain our long-term commitment to a 3.5 percent rate increase, but help meet the crisis caused by COVID-19 with a one-off increase in the average general rates for the next financial year of 5 percent, before returning to 3.5 per cent from the following year onwards," he added.

Goff said additional income raised by the increase means Auckland Council can leverage its borrowing. It would support an extra $450 million of investment over the next ten years.

Auckland Council proposed targeted rate increase: 1.2 percent

  • 1.2 percent waste management increase. An extra $1.68 per year (on average).

"The proposed budget includes an inflation adjustment to the waste management targeted rate.

"For the average value residential property [it] equates to $1.68 next year, or around 0.03 cents per week," Goff said.

He said this rate pays for refuse collection and disposal services, recycling, food scraps collection, waste transfer stations and resource recovery centres. It is charged on a cost-recovery basis.

"It's an inflation adjustment, so does not bring in net additional revenue to the council," Goff said.

Auckland Council proposed targeted rate increase: 0.9 percent (certain households)

  • 0.9 percent refuse collection increase (non 'user-pays' households only). An extra $1.34 per year (on average).

For legacy Auckland City Council and Manukau City Council areas that haven't changed to 'user pays' waste collection, Auckland Council is proposing a 0.9 percent increase to the refuse collection charge rates component.

"For the average residential property, [it] equates to $1.34 next year, or around 0.025 cents per week, Goff added.

For households in legacy areas, the two targeted rate increases would cost an extra $3.02 per year (on average).

In 2020/2021, water rates increased 2.5 percent, representing an additional cost to households. Water rates are set by the board of Watercare, and there has not yet been a decision on future increases, Goff added.

Auckland Council confirmed that a committee would decide which parts of the budget proposal will go to consultation. Public consultation will start in February, including engagement and feedback from regional stakeholders and the community.

A final proposal would go to councillors in June and the new budget would come into effect for Auckland Council rates from July 1.