24 Mar 2010

No extra tax bill for super-city ratepayers - Hide

5:37 pm on 24 March 2010

The Government is disputing claims Aucklanders could face an extra tax bill under the new super-city.

The super-city mayoral candidates, Len Brown and John Banks, say the commercial companies being set up to run many of the region's core services will incur tax that councils are currently exempt from. They include water, transport and economic development.

The Auckland City Council says the extra annual tax bill for ratepayers could run to tens of millions of dollars.

But the Government says the new Council Controlled Organisations (CCOs) are unlikely to make a profit, so will not have much to tax.

Local Government Minister Rodney Hide says Auckland will be better off overall.

"I've been advised by officials that the tax savings to the entire Auckland region, as a result of the restructuring, is estimated to be about $10 million a year."

Auckland City Council raised its concerns about the tax in a draft submission to the Government on the planned Council Controlled Organisations.

Auckland's eight councils are exempt from paying some taxes, and the city council is worried the benefit from that policy may be lost in the formation of the super-city.

In its submission, the council asks the Government to make the new companies temporarily tax exempt while a solution is worked out that will not place an extra burden on ratepayers.