Pursuant to section 23(5) of the Local Government Rating Act 2002 (the Act), local authorities are required to submit a copy of their rates resolution to the Department of Internal Affairs (the Department).
Since financial year (FY) 2007/08, staff from the Department have collated and analysed these resolutions to better understand:
- how the various rating tools are being used
- the amount of revenue forecast to be generated by each mechanism (sector-wide), and
- if there are any trends over time in the way the various tools are being used.
This report details the results of analysis of the 2010/11 rates resolutions as produced by councils. Where needed, information from Funding Impact Statements (FIS) published in councils annual plans for the same financial year, was used to supplement that from the resolutions. The data from 2010/11 was also compared to data collated from resolutions for the previous three years.
Notes regarding the data
Unless otherwise stated, all years referred to in this report are financial years (1 July – 30 June).
There is no adopted format for presentation of a rates resolution or FIS. As a result, no two councils present their rates information exactly the same way. While the Department has put significant effort into recording rates information accurately and consistently from year to year, some errors in interpretation may have occurred.
The Auckland Council, formed on 1 November 2010, will not adopt a rates resolution or annual plan until 2011/12. In the interim, the forecast rates revenue and resolutions for the eight disaggregated former councils are included in this report as a proxy to represent the Auckland Council. This data (which includes the former Auckland Regional Council) is listed under territorial authorities for both 2009/10 and 2010/11.
Rates based upon volume of water consumed have been consistently excluded from the collection of 2009/10 and 2010/11 revenue forecasts. This means that for councils with volumetric-based fixed-water charges, the total rates revenue in this report may be lower than that indicated for the total announced rates revenue.
As of June 2011, some questions still remain for six councils regarding aspects of their forecast rates revenue for 2010/11. The main issue being that councils have combined forecast revenue from two different rating mechanisms (fixed water rates and metered water rates, or fixed and value based rates for a single service). These councils have been approached to seek clarification. When received, the responses from these councils have the potential to alter the total amount reported by up to $50 million.
All rates revenue forecast in this report includes GST at the rate of 12.5% from 1 July 2007, and 15% from 1 October 2010. For 2010/11, this is equivalent to an annual GST of 14.375%. This change will affect the differences between rates forecast in 2010/11, and those from the previous year (2009/10), which had a uniform rate of 12.5% for GST.