Monday, March 16, 2009

Rates Blowout

We should be outraged with the announcement that Local authorities have managed to increase rates by more than twice the rate of inflation last year.

Accommodation providers and other small businesses bear the brunt of local body excess and have a vested interest in the efficiencies of local government.

We like the rhetoric of new local government minister Rodney Hide that has said that councils need to to focus on core activities, cull any luxuries and cap rates at the rate of inflation – or less.

For the benefit of their members, our industry leaders should be at the forefront of working with Hide to ensure that he follows through with his words.


The country's local authorities hiked rates by more than twice the rate of inflation in the year to December.
Statistics New Zealand figures out today show rates rose 8.1 percent, or by $72.3 million to $962.8 million, last year compared to a 3.4 percent rise in the Consumer Price Index.

Overall the country's 12 regional councils and 74 territorial authorities recorded a $111.5 million, or 7.1 percent, operating revenue rise in the December quarter from the December 2007 quarter to $1.689 billion. Aside from rates, government grants and subsidies were the main contributor to higher revenue, up 28.5 percent, or $55.1 million.

The increased rates charges and more government money saw local authorities produce a $51 million seasonally adjusted profit in the December quarter. This was, however, down $13.5 million - or 21 percent - from the December 2007 quarter as councils spent $125 million more than they had a year earlier.

Source: Click HERE

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