Fuseworks Media

Central Govt should pay rates like everyone else – Auckland Council

Following adoptions of recommendations from both the Auckland Council Governing Body and the Houkura Independent Māori Statutory Board, the Mayor has formally requested the Government;

  • Pay rates on its own buildings in Auckland.
  • Reform laws around non-rateable land.
  • Transfer revenue equivalent to the GST charged on rates to Auckland Council.
  • Provide a share of the portion of GST collected on new residential builds.

In 2023/24 values, the total value of rates that central government is exempt from is estimated as $36,331,007.

Auckland Mayor Wayne Brown says it’s unfair the government doesn’t pay rates like everyone else, even though it uses council services.

“Why should central Government get a free ride? They use our infrastructure but don’t pay the bill.

$36,331,007 is a lot of money that should be returned to council for the upkeep of services to these properties.

This is already a key ask in my Manifesto for an Auckland deal. I know there is appetite for it, politically and publicly.”

There are also properties such as airports, port land, other transport use land, wharves, jetties and churches which are non-rateable under the Local Government (Rating) Act 2002.

He says it’s old government laws like this one that are allowing private enterprises to get a free ride when Aucklanders are struggling to make ends meet. Law-reform would be required to bring the real-world application up-to-date.

“It seems odd to me, that a multi-billion dollar listed company such as Auckland International Airport Limited is sitting on hundreds of millions of dollars’ worth of non-rateable land, when everyday Aucklanders are doing it tough.”

Council staff estimates show the total value of GST on rates in 23/24 was $415,350,000. If that money was returned to Aucklanders, it would enable rates to be 15% lower (a reduction in rates of 7.5% for the average household for the next financial year instead of the 7.5% increase proposed in the Long-term Plan central scenario, out now for public consultation). Staff estimates show for the 24/25 financial year, that would be an average savings per household of $506.40.

Mayor Wayne Brown says the Government takes far more than its fair share from Aucklanders.

“Aucklanders are being shortchanged. We put more into Treasury’s coffers than we get in return. We want a fair share of the revenue Auckland generates, and in this instance the government is smart enough to recognise this. I’m looking forward to the discussions here.”

There is no other local authority in Australasia responsible for governing a third of the national population, yet revenue gained from government transfers in comparable regions shows Auckland isn’t getting a fair deal.

He says it would bring Auckland in better alignment with our overseas counterparts.

“In size and scope, we are more akin to a State Government in Australia. Australian states receive 45% of their revenue through transfers from the federal government; Auckland Council receives a paltry 12%. No wonder we can’t keep up.”

He says Auckland is straining under the cost of residential growth and receiving a share of GST collected on new builds would be fitting.

“It also doesn’t make sense that council doesn’t receive a share of GST collected on new builds; we have to foot the bill for the infrastructure and other amenities needed for new builds, yet the money goes to Wellington? I’m also looking-forward to the conversations here.”

A return of GST on rates, and additionally that the Government pays rates on its own property, were recommendations from the 2023 Future for Local Government review. The review also recognised that the current local government funding and finance system was already under pressure and was not sustainable.

 

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