Syed Akbar Kamal: Rates Revolt in Auckland

A rates revolt campaign has been launched by a section of Auckland City Council residents spearheaded by Penny Bright. The dispute centres on the continuation of ‘charitable payments’ by the Council owned Metrowater and her inability to elicit a disclosure from Auckland City Council over the alleged $850 million spend on contracting out its services to contractors.

‘We don’t know where our hard earned rates money is going’, wondered Ms. Bright and questioned ‘if we are not being told where exactly our money is going and they are not looking after it properly then why should we give them any?’

She stated that she has formally written to the Council notifying it her refusal to pay the rates and Metrowater account in what she termed as ‘unfair, unreasonable and inflated’.

The issue surrounding the ‘charitable payments’ from Metrowater and the internal ramblings within City Vision led Council saw the political demise of the deputy mayor Dr. Bruce Hucker last year.

Mayor John Banks who was returned at the hustings had campaigned to eliminate the practice of taking charitable payments. In an interview soon after assuming office, in reference to Metrowater had remarked ‘the cash cow is milked to death…and buried.’

This time Mr. Banks did not see it as an ‘issue’ and would not be drawn into making a comment other than highlighting the implications of rates refusal.

Mr. Banks, prior to last October’s local body elections, used to regularly field Ms. Bright on his talk-back radio show.

Ms. Bright is accusing C & R and the mayor of making an about turn and asking how he could allow a contravention of his campaign pledge to eliminate 'charitable payments' financed from water-user charges.

The council has decided to accept a $24 million payment from Metrowater this year, $18 million next year, $15 million the following year and $7 million the fourth year thereby effectively walking in the footsteps of Dr. Bruce Hucker and keeping alive the ‘water gouging’ controversy.

Interestingly, it was Dr. Nick Smith National MP for Environment, conservation & climate change and his colleague John Carter who had opposed the charitable payments when the Parliament Select Committee inquired into the charging and practices of Metrowater and Watercare Services Ltd and the actions and practices of Auckland City Council’s Finance and Corporate Business Committee.
Parliament Select Committee intervened on a petition from Ms. Bright to review the extraction of ‘charitable payments’ from Metrowater and ruled it as ‘unacceptable’.

We are, nevertheless, concerned about the council’s use of charitable payments. While other councils receive dividends from companies that they own, no other council receives charitable payments on the scale of the forecast payments by Metrowater to Auckland City Council. The availability of such large charitable payments has implications in other areas. For example, it may mean that the council can avoid increasing rates to the extent that might otherwise be necessary. We are concerned that raising large amounts of money in this way avoids the public scrutiny to which the collection of revenue by councils should be subject.

We consider that the charitable payments engineered by the city council from Metrowater were on a scale that undermined the intent of the constitution of Metrowater when it was established by the council. If the council had intended payments on this scale ($324 million), it should have revised the constitution of Metrowater rather than abusing the provisions providing for charitable payments.

We consider that the use of charitable payments in this way, and to this extent, is not best practice, and emphasise our concern that it should not be adopted by other local authorities. It is not acceptable. We strongly advise Auckland City Council to reconsider its requirement for charitable payments from Metrowater in the years 2007 to 2017.

Syed Akbar Kamal is Producer/Director for nationwide current affairs programme Darpan-The Mirror on the satellite feed Stratos & Triangle TV.

www.teamworkproductions.co.nz

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