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Wednesday, 20 February 2008

ISLAND RATES AND PENINSULAR RATES

The rating system they have on the peninsula is designed to ensure that everyone except the rich are not rated out. If we were with Thames-Coromandel we would have that system, in which only an average 19% of your rates bill is a charge based on capital value, the rest is fixed charges (such as for rubbish), and charges based on improved value and land value. So big changes in capital valuations don't cripple you. For instance, if your rates bill was $1000 and your capital valuation for some reason went mad and doubled, your rates would go up only to an average $1190. On top of that their community boards have deep involvement in annual plans and setting budgets, and setting local rates, and I have insisted from the start in my talks with Thames-Coromandel that there be a financial firewall between the islands and the peninsula so that we are insulated from them and vica versa.

So people on Waiheke who are being socked by Auckland on its exorbitant capital values, but have modest improved values, will be better off. To put it another way, we can collect the same total in rates but with a much fairer balance.

That means, amongst other things, that comparing rates between Waiheke and, say, Coromandel is not comparing apples with apples. We will be deciding what we want in our budget, through our community board, and our rates will be set on that. Targeted rates for an item that one area wants are targeted to that area only, based on improved value. For instance, one area on the peninsula wanted a new library, another a swimming-pool. The council said yes, and set up a targeted rate only for that project, only in that area, based on improved value, so the cost of what the community wanted was spread fairly according to income.

One of my responsibilities under the Local Government Act 2002, as the proposer in this exercise, is to submit a draft reorganisation proposal when the application is formally made to the councils and on to the Local Government Commission. I have no wish to see the island worse off, and I am most anxious to ensure that low- and middle-income people are not hurt. My proposal, and my involvement at every point, will focus on making sure of that. I will not accept any reorganisation proposal that doesn't.