Auckland rates to go up up up

August 29th, 2014 at 11:00 am by David Farrar

The Herald reports:

Auckland Mayor Len Brown is talking of selling council carparks and naming rights to swimming pools to help balance the books in his new 10-year budget.

Mr Brown released his first draft of the budget yesterday, which contains overall rates rises of 2.5 per cent in the first two years and 3.5 per cent thereafter.

But due to a plan to reduce business rates at the expense of households, residential rates will increase by about 3.5 per cent in the first two years and 4.5 per cent over the next six years.

A Mayoral candidate in 2016 pledging that rates will not increase faster than inflation will easily win I’d say.

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62 Responses to “Auckland rates to go up up up”

  1. Odakyu-sen (640 comments) says:

    Let the budget be set by an independent body. (Why would you allow the fox to allocate the chickens?)

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  2. Viking2 (11,467 comments) says:

    DPF, Wellington will get its turn. All those earthquake prone buildings the council has to trash.

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  3. ROJ (121 comments) says:

    How many have linked this story with the beatup that went with the release of the council financial results on the Stock Exchange?

    (For those who don’t want to do it themsleves, its a total disconnect!)

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  4. Padriv Ustoev (63 comments) says:

    A community group I am involved with is already bidding to rename the Henderson pools to “Abu Bakr al-Baghdadi aquatic centre.” They hope to offer women only pool use on wednsdays.

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  5. Rich Prick (1,700 comments) says:

    “Len Brown is talking of selling council carparks and naming rights to swimming pools to help balance the books”

    $7.5b in debt and that’s his solution? This has more than a whiff of desperation. Socialists really are useless when they run out of other peoples’ money.

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  6. Tarquin North (296 comments) says:

    Move to Northland! Our council isn’t quite as bad – not from lack of trying! The rates on a $300,000 house are about $1500 in Whangarei, and $300,000 buys you a nice house. Waterfront at One Tree Point? 7 – 800,000 should do it.

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  7. Padriv Ustoev (63 comments) says:

    Tarquini North – move to Northland and do what for a job exactly?

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  8. virtualmark (1,523 comments) says:

    Genuine question: Why are the lefties so determined to get the inner City rail loop, even at the expense of other public transport initiatives like a North-Western busway?

    I don’t understand the exclusive focus on one big expensive (white elephant …) project that will serve only a small-ish portion of the population, but will suck up all the available public transport funding and more.

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  9. Richard (855 comments) says:

    Try living in Christchurch- then you’ll know what rate rises really are.

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  10. OneTrack (3,088 comments) says:

    What’s the word on the funding for the State House with A Chandelier piece of “protest art”(tm) for Queens Wharf?

    Still going ahead is it? Good on you Len, focussing on the important stuff. As usual.

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  11. burt (8,269 comments) says:

    It’s inconceivable that a left leaning Labour party affiliated Mayor could have created such an economic nightmare – it’s not like every Labour government for the last 50 years has done the same thing to the country rather than just 1 city.. Oh, hang on – Doh!

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  12. burt (8,269 comments) says:

    Resign Len – You are a disgrace.

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  13. Tarquin North (296 comments) says:

    Quaintly enough Padriv, there is plenty of work up here. Passing a drugs test seems to cull off most of the locals. The pay rates probably aren’t quite as good as back in the old country but the fisning is pretty good.

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  14. Huevon (222 comments) says:

    Naming rights on swimming pools to balance the budget…sounds like the kind of option you get on Sim City….

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  15. chris (647 comments) says:

    But due to a plan to reduce business rates at the expense of households, residential rates will increase by about 3.5 per cent in the first two years and 4.5 per cent over the next six years.

    Which will be true of the overall rates increases, but individuals will continue to find their rates increases each year much higher than that. For example, the average rates increase in the last 3 years has been something like 3.5%, yet my rates have increased by about 8% each year. So I assume this will continue to be the case.

    I see them always waffling on about cutting capital expenditure, and sometimes core services, but no where do I see them talking about reducing their staffing levels. What were the numbers again? Something like 1500 people who are policy analysts and planners? All of who will be on at least $100k per year each.

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  16. Mike Readman (363 comments) says:

    Don’t move to Chch. Our rates keep going up 7.5% per year with no end in sight.

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  17. seerob1946 (24 comments) says:

    If a city is too expensive to live in you move out to where you can afford it… the war cry of where are the jobs doesn’t apply in the smaller centres as jobs are by word of mouth and are there if you want them….MOVE OUT OF AUCKLAND

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  18. greenjacket (465 comments) says:

    “selling council carparks ”
    So asset sales are OK when a Labour politician does it?

    “naming rights to swimming pools to help balance the books”
    Yeah. That’ll fix the budget. Len Brown seems to have been getting financial advice from a primary school project.

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  19. The Bangles (49 comments) says:

    Rich Prick and Greenjacket, in regards to your comment. The definition of bankruptcy means unable to pay your creditors. And when people are unable to pay their creditors they have to sell. Now why is Len Brown unable to pay the creditors. Because he’s an out of control spender. And until people get the spending under control, rates will have to go up, or more things will get sold.

    “And he’s bad bad leroy brown the baddest man in the whole damn town”-Bad, Bad leroy brown song by Jim Croce. Just the name Len Brown gave me the creeps, with the Auckland City Council elections.

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  20. Daniel (208 comments) says:

    Aucklanders are getting exactly what they voted for.

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  21. wreck1080 (3,905 comments) says:

    Part of the problem is central government which has been forcing extra costs and responsibilities onto councils too.

    Another increasing are of concern is the maori economic impediments — councils almost have to get the tribe to agree (for a fee) to mow berms these days.

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  22. maxwell (55 comments) says:

    Down here in Dunners we lust after a 3.5% rates rise. Luxury.

    For at least the last decade we have rates rises of 3-5 times the rate of inflation.

    Last year was ONLY 4.5% but we have had rises of 9, 10 even 11% when Chin was Mayor.

    On top of this the Council was instructing its Council Controlled Co’s (CCO’s) to borrow money to pay the Council
    bigger dividends to keep rate rises down. This insanity has now stopped.

    As far as we can tell from the (deliberately ?) obscure DCC accounts we (the DCC & the CCO’s) are 650 million in debt, nearly all of it
    incurred in the last 15 years, for a static population of 53,000 ratepayers and house prices barely rising.

    We are the most indebted ratepayers per head in the country and still only about 40% bother voting in local body elections.

    We are very exposed to a rise in interest rates.

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  23. stephieboy (3,013 comments) says:

    Frankly Auckland’s the poorer without someone like Banksie at the helm. He at least made a sincere and meaningful attempt to control rates by controlling spending under his “affordable progress “

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  24. Tarquin North (296 comments) says:

    I gave you an up tick Padriv, I don’t think I’ve ever been called Tarquini before! Can’t work out if it sounds regal or like a cross dresser. The staff think it’s hilarious!

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  25. The Bangles (49 comments) says:

    Len Brown has really raised the indebtedness of Auckland. And now, he can’t cut expenditure enough to have a balanced budget. By selling assets it will help pay for some of the current Auckland spending. But once the carparks are sold, less money will come into the Auckland city council. So the headache will get even worse, even less money available.

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  26. burt (8,269 comments) says:

    The Bangles

    Selling assets is different when the left do it.

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  27. OneTrack (3,088 comments) says:

    Daniel – “Aucklanders are getting exactly what they voted for.”

    And we have almost 50% of the voting population still ready to have exactly the same thing happen at a national level.

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  28. The Bangles (49 comments) says:

    Burt, yes its really bad when the left do it. And why are they doing it? Cause they can’t make ends meet. But its going to be even worse, once the carparks get sold. Less revenue on a yearly basis. A short term solution, a long-term disaster.

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  29. lastmanstanding (1,293 comments) says:

    The fact is borne out by my our rates in the same house that Auckland Council rates have increases at 300% of the erate of inflation and the average wage and salary increases over the past thirty years. and the moron Brown and his fellow morons have no intention of curbing increases.

    No action to curtail the 1000 plus highly paid in the planning department nor the 600 plus highly paid in the policy department.

    I and no doubt any number of others with the experience and knowledge of running large organisations could cut the spending by a quarter to a third without effecting ratepayers services. In fact we would increase the service to ratepayers.

    It aint rocket science its about taking a pruning knife to the waste

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  30. edhunter (546 comments) says:

    Here’s an idea charge people to use the frikin pools.

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  31. PaulL (5,981 comments) says:

    Weak really. Expressing it as “business rates to be cut at the expense of households” is perhaps true, but not entirely accurate. In other words, businesses currently pay a disproportionate share of rates, and it’s being rebalanced, which isn’t the impression you’d get from the article.

    The real problem is that the council is spending too much money to deliver too little. They need a zero based review of everything they’re doing to ask the question “do we need to do this”, and then “how much should we be spending to do this based on best practice.” No real hope of that being done with Len in charge.

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  32. NK (1,243 comments) says:

    I can’t believe people are surprised by this, and I don’t mean because it’s a Labour mayor.

    The previous councils in Auckland had horrendous records of tax and spend. Why weren’t you all concerned then? I heard Cameron Brewer on the radio last night – what a great guy he is. But, he was decrying user pays saying it was another cost for ratepayers etc!! WTF!! Rates shouldn’t be a revenue source at all, and it should all be user pays as much as possible.

    What has occurred is that when you combine seven councils into one, and all the debt, a figure of $x billion sounds a lot scarier than $x hundred million. The debt has increased per capita, sure, but if you analyse the debt projections of the former seven councils, it was pretty much the same, except for a few really big infrastructure projects that Len says Auckland needs (the CRL for example).

    I’m not saying 2.5% is right, nor is 3.5%. I’m saying this has been going on for donkeys years and is now into the spotlight *because* we have a Super City. That’s a good thing, because it pute the blowtorch on council’s behaviour.

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  33. The Bangles (49 comments) says:

    Ah, yes lastmanstanding, but lets not also forget the interest on the debt is getting to an alarming amount. Let’s suppose Auckland City bonds pay out 2% per year. This means every $billion of council debt needs to be paid at 2% x $1b = $20,000,000. Now it could quite easily be more than 2%, and it is most certainly in the billions.

    The point I’m trying to make, is the bigger the debt, the more interest you pay. And their’s really not much you can do about the interest. So my point is the bigger the debt the harder it is fix the problem. Oh, and Len is warm to Greens on public transportation. So he says he wants Auckland to be the most livable city, and that’s why he’s going to spend, spend, spend.

    I want a new mayor, and I’m going to chant “Bad, Bad Len Brown, the baddest man in the whole damn town”, until he leaves. Now who wants to join me?

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  34. PaulL (5,981 comments) says:

    If Auckland city council can borrow money at 2% I’d be very surprised.

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  35. Mark (1,488 comments) says:

    So Acts Super City is working well then :)

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  36. The Bangles (49 comments) says:

    NK, I know that Libertarians believe in user pays. Well here’s the thing, the USA has arguably been the freest country on earth, until people like Obama came in. But when the country was founded their were only three taxes. Land tax (similiar to rates), tax on domestically made goods, and a tax on imported goods. The only user pay was postage. Every year the US had a surplus except years of war. In the 1910s they brought in a central bank and an income tax to add to the taxes. In almost every year since then, America has had a deficit.

    Secondly, Ruth Richardson brought in user pays in the 1990s into New Zealand. We still pay income tax, GST, rates, a higher rate of tax on oil, cigarettes, and alcohol. And the $24 billion in ACC, is lent to the government. So I know that Libertarians are always going to argue about user pays.

    Well here’s the thing, when the USA was the freest country on earth, they only had three taxes, and when New Zealand added user pays, we still have kept the other taxes. So I’m in favour of having a set amount of taxes and that’s it.

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  37. Mark (1,488 comments) says:

    PaulL (5,980 comments) says:
    August 29th, 2014 at 12:29 pm

    If Auckland city council can borrow money at 2% I’d be very surprised.

    Why bother borrowing it, just tax more and more and more and more ……………………………………… and again. Agree with the earlier comment that the socialists running Auckland are giving us all a useful insight into what the gaggle of Labour/Greens and Mana will achieve running the country.

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  38. NK (1,243 comments) says:

    So Acts Super City is working well then

    It was Labour’s Royal Commission put into effect by the National government.

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  39. Inthisdress (262 comments) says:

    Perhaps if Brown had put as much effort into balacing the books and running the city as into his private gym, hotel trysts, f**ing on the table and engaging in phome-sex … but what am I thiking? How dare I criticise his ‘private life’.

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  40. The Bangles (49 comments) says:

    PaulL & Mark, If you go to the NZ Debt Management Office, you will be very surprised. They show that kiwibonds have paid below 3%, if the commitment is for 6 months. Now why’s this? If a mortgage is 6% or so, how can government bonds be less than half. Well, how do we explain personal and business loans being double the mortgage rate. In banking, the banks are required to keep 10% on hand and can lend the other 90%, right?

    No, not quite they have a capital adequacy requirement rule. If you lend $1,000, they must keep 8% of that $1,000 ($80) on hand depending on the risk weighting. Personal and business loans have a 100% risk weighting, meaning the bank would need to keep 100% of the $80 on hand if lent to businesses or as a personal loan. Mortgages are 50% risk weighted, this means the bank needs to keep 50% of $80 on hand, if lent on property. So now that they only need to keep half as much on hand, they can charge a lower rate.

    Well government loans (bonds) have the lowest risk weighting, which is why they pay the least amount. And who do you think created this risk weighting? Anyhow I still have this textbook which refers to this, I studied Principles of banking at AUT, as part of my accounting qualification. Anyhow, I never said it would be 2%, I said “Let’s suppose the Auckland city Council pays 2%”, and later I said it can quite easily be above 2%.

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  41. Viking2 (11,467 comments) says:

    Padriv Ustoev (33 comments) says:
    August 29th, 2014 at 11:08 am

    A community group I am involved with is already bidding to rename the Henderson pools to “Abu Bakr al-Baghdadi aquatic centre.” They hope to offer women only pool use on wednsdays.
    =========================================

    No doubt with perv’s like yourself supervising.
    What a fucked up mind and attitude.

    The rest of us moved on 2200 years ago.

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  42. The Bangles (49 comments) says:

    InThisDress, If you listen to the song “bad, bad leroy brown”, its about a man who uses his power to take advantage of women, and talks about the weapons he can use on anyone who opposes him. Len Brown, has treated some women like they’re nothing but sexual objects, and now he’s misusing his power, on us Auckland residents.

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  43. Redbaiter (8,801 comments) says:

    Auckland gets the government it deserves and the multi-culturalism it deserves.

    You voted for it progs, now suck it up.

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  44. Viking2 (11,467 comments) says:

    Tarquin North (206 comments) says:
    August 29th, 2014 at 11:29 am

    Quaintly enough Padriv, there is plenty of work up here. Passing a drugs test seems to cull off most of the locals. The pay rates probably aren’t quite as good as back in the old country but the fisning is pretty good.
    =======================
    No worries TQN

    Never me ta muslim man that actually worked. The make their ladies support them as well as their 10 children.

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  45. dog_eat_dog (780 comments) says:

    Reducing rates that will be tax deductible for businesses and increasing them on residential property which won’t be deductible unless you’re an investor.

    Yea, that makes perfect sense.

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  46. Grizz (605 comments) says:

    DPF: Voting for a fiscally conservative Mayor is harder than you think. Most voters do not personally pay rates. Their spouse might, but they have no idea. Others do not own property so do not see a rates bill. Then there are the Penny Brights of this world who refuse to pay but are happy to steal council provided services. If a mayor offers lots of carrots then if you are not influenced by a rates bill, you will take it.

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  47. 2boyz (262 comments) says:

    Is the ‘Super City’ a failed experiment or are current predicaments due to plain bad management, bit of both I’d say.

    Can I see it happening in other centres in NZ, yes indeed!

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  48. Surely Knott (12 comments) says:

    Plenty of complaints levelled at Mayor Brown (and fair enough). But Mayor Brown isn’t running the show – he’s only a part of the problem. He gets paid $290k. The CEO, Stephen Town, gets paid $690 k. There is a team of 10 on the management executive. They are in charge of execution and it’s a mess! Last Man Standing is on the money. Don’t cut services, take a knife to the waste, hold the executive accountable and make their salaries performance based.

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  49. The Bangles (49 comments) says:

    That’s right Grizz. The landlord pays the rates, but the resident pays the landlord the rent which includes enough to pay the rates. So a resident pays rates indirectly, and has no idea in the world how much it is, yet moans and groans about the rent going up.

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  50. Mr_Blobby (173 comments) says:

    It is not rocket science.

    Councils should be restricted to their original purpose the basics.

    Get rid of the overpaid over educated bureaucrats and get back to the basics.

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  51. The Bangles (49 comments) says:

    Amen, Mr. Blobby, if the rates aren’t enough to pay for things, they just need to cut things back, no ifs, buts or maybes.

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  52. Surely Knott (12 comments) says:

    The rates ARE enough to deliver * things *. They need to deliver them efficiently. I don’t mind slightly higher rates and luxury services and amenities. I don’t mind reduced rates and reduced services. But everyone – right and left – agrees that high rates and bugger all services is not ok. And for a number of parts of Auckland that has been the case. Population growth and housing price increases have delivered council a huge increase in income. Make it work.

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  53. lazza (381 comments) says:

    Auckland Council finances would be best first addressed, not with all these meandering budget discussions but by … “starting at the other end”.

    Reasonable rates are derived from reasonable cost structures that currently are totally lacking … given the current administration’s abandonment of any pretense of cost effective delivery of its services.

    Until a Council culture of performance, coupled to a budgetary process that reflects provision of core cost effective services is in place, then our “World’s most liveable City” will continue to rank amongst the” Most Unaffordable”.

    And Yes Please. We have to line up a Council Mayor and Team for 2016 that “get it”.

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  54. burt (8,269 comments) says:

    Much should be made in the media of Len’s Labour party status. This problem in Auckland is exactly what NZ suffers every single time Labour are in government.

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  55. Redbaiter (8,801 comments) says:

    “Much should be made in the media of Len’s Labour party status. This problem in Auckland is exactly what NZ suffers every single time Labour are in government.”

    So tell me again why the Helen Key National party is borrowing $60 billion and expanding government spending to $100 billion by 2017?

    Helen Klark (Labour) left about a $9 billion deficit and was spending about $60 billion.

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  56. Tarquin North (296 comments) says:

    Don’t worry Viking 2, I’m going to pop round to Padriv’s pool next Wednesday in my crochet mankini and burka. That’ll make him homesick real fast. In the interem, I’m off to the pub for a few bevvies and then Sky City tomorrow for my birthday. Have a good weekend all.

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  57. OneTrack (3,088 comments) says:

    Mark – “So Acts Super City is working well then :)

    So Labour’s Mayor is working well you mean. Poor show by Hide. Even in his worst case scenarios, he didn’t count on Aucklanders voting in the wastral Labour mayor – “Nah, they wouldn’t be that silly……”.

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  58. The Bangles (49 comments) says:

    Redbaiter, I’m glad you asked. From 1993 till 2007, In almost every year regardless of a National, Winston or a Labour led government, NZ had a surplus. In 2005, Helen Clark said we’re in the black by $1 billion. This meant that the super/kiwisaver fund was greater than the crown debt by a $billion. Since then, we have paid for the Greens emmissions trading scheme. Whenever we use power, we have to pay a tax for it.

    And this tax doesn’t go to hire kiwis to grow trees. This goes to Bangladesh or another third world country to grow their trees. No matter who is in power, this tax is a killer. Its a killer because, it was designed to start off low and then grow, as a way of saying get more energy efficient, will tax you little now, but higher later. And 2ndly its not circulating in New Zealand. If people have any brains at all, why can’t it be used to grow our own trees. Or how bout we make it, that those who pay the energy tax, can use that money to buy a more efficient fridge. If people can’t pay for a new fridge, and are saving, but they’re being hit with this tax, off goes their savings, so it’ll take longer for a more energy efficient fridge.

    The Greens have absolutely no sense at all, even I could fix the environment better than they ever could. Now as I was saying ever since we’ve had this tax we’ve gone into deficit mode. And other countries have had this tax, which means they have less money to buy our goods. This is why the world has taken forever to recover.

    In 1920, in the USA, unemployment was 12%. In 6 months president Warren G Harding brought it down to 6%. He cut income tax from 70% of the top earner to 20%, and he was able to do it by increasing the tax on goods, and slashing government administration by half. The ETS is hampering us and the world, and I have a good mind to tell the Greens they deserve to be down troughed in public for what they’ve done to us, and why. At least with a jolly good laugh, we’ll get crumbs for the money they’ve wasted.

    Or better yet, pay a kid, and then say your the guys who started the antismacking bill.

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  59. Redbaiter (8,801 comments) says:

    The Bangles- good readable comment but you’ll need to remind me when the Greens were in govt. I must have missed it.

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  60. The Bangles (49 comments) says:

    Hi Redbaiter, I just got home, I see that I need to clarify myself, if you look up Kyoto Protocol, that was an idea that was pushed in 1997. The Greens were around at that time. And of course during the 90s people became aware that the earth was running out of resources (well that’s what they were told). In 2005, an organisation started up a thing called decision 05, where they hosted political debates so that people would know what they were voting for.

    The Greens of course pushed their Kyoto Protocol in that debate. I can remember in 2007 looking at a billboard, in Auckland City Central, near the bridge to the North Shore, asking people to text that they support the environment. And Lucy Lawless a celebrity was one of the people pushing it. At that time, this country and the world was doing well, so of course we could afford to do something or so we thought. So next year, 2008 we start to participate in this scheme.

    It was the Labour-Greens who implemented this agreement with the United Nations, and it was backed up by people who were not properly informed. So technically speaking National, could wait for the Kyoto agreement to expire, and then not renew. Oh, but the Greens have 14% or so. If the Nats were to scrap the Resource Management Act, the ETS etc, the Greens and their supporters would do something about it. So that’s why other parties have an environmental policy to say we care about the environment, but their’s other ways to go about it.

    So in short, the Greens were a group that implemented it 2007 or 2008, and if National dares to not renew it, the Greens are going to fight for it. So it is possible to have an effect when your in Parliament, even if your not in government.

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  61. hj (6,991 comments) says:

    Auckland rates to go up up up

    because immigration is Up, Up, Up!
    Tony Alexander’s view on house prices

    In BNZ Chief Economist Tony Alexander’s weekly overview, Auckland house prices are set to move upwards nicely. Here are his 19 reasons why:
     

    3. The government is explicitly aiming to grow Auckland’s population as a means of achieving “agglomeration” benefits for economic growth which accrue from high interaction amongst economic players.

    17. The government has announced its efforts to improve housing affordability (lower prices) and they are minor and unlikely to have a noticeable impact if any for many years.

    http://www.davidwhitburn.com/blogs/auckland-house-prices-to-rise-over-10-in-2013/

    And (in Chch) at least, development contributions are going Down, Down, Down!

    Wayne Mapp

    One thing is absolutely clear, Auckland will grow to 2.5 million in 30 years. Around the town centers there will be increased density. But in areas where the norm is townhouse and traditional housing there will be huge resistance to multilevel apartments. Mayor Len of course knows this, and the plan will be adjusted to take that sting out. Typically in these exercises you put your maximum position out for consultation to give some space to pull back. Of course some planners may not understand this political nuance, and probably not some councillors (i.e. Anne Hartley, judging by her reported comments at the meeting).

    http://www.kiwiblog.co.nz/2013/05/roughan_on_auckland_rumblings.html/comment-page-1#comment-1147615

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  62. Left Right and Centre (2,975 comments) says:

    You’ve ree-ee-ee-ee-ee-eealy got to want to live there now, eh ?

    Because they’re doing all they can to put you off !!

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