Can We Tolerate an Increase in Tax (or Rates) if it Meant Better Services? #AKLPols

According to the Australians – yes

 

Yesterday Auckland Future’s Auckland Mayoral Candidate Victoria Crone trotted out the tried and failed Rates Cap policy (2% for residential) along with this thing about efficiency savings (already happening) and sinking lid on staff numbers (good luck getting a consent or a bylaw enforced). The question is though is there any tolerance for tax increases if it mean better services or investment was sped up from the original timetable?

That was the question around the Interim Transport Levy which allows the speeding up of things like the Manukau and Otahuhu Transport Interchanges (key planks of the South Auckland New Network due to start late this year).

 

So I ask you would you tolerate a reasonable amount of Rates increases if it meant:

  • More consenting staff to process resource and building consents
  • More staff to enforce bylaws
  • Bringing forward transport projects
  • Maybe your park upgrade or new community centre
  • Berm mowing

Providing the rest of a Council Budget didn’t go on a spending binge on things not really relevant to the City (ATEED and economic development? I believe that role belongs to Government) I would say most rational people would say yes to that reasonable Rates increase. Especially if it meant over the longer term less Rates increases to the point of zero increases because our investment was finally ahead of the City growth curve rather than being constantly behind it (there is a reason why I have most infrastructure placed in AHEAD of a new development in Cities Skylines).

 

This piece from Tax and Transfer Policy Institute looks at the tax verse expenditure question:

ANUpoll: Government’s Deficit Dilemma with a Confused Electorate

The latest ANUpoll shows that people would prefer the government to tax their way out of deficit rather than to reduce spending on social services. In particular, the areas they don’t want cut are health, education and welfare spending.

54 per cent prefer higher taxes compared to only 32 per cent who prefer lower spending. This follows a long-term trend in the poll towards people favouring more spending over less taxation. In 1987 65 per cent preferred less taxation and just 25 per cent preferred spending more on social services. By 2016 only 36 per cent favour reducing taxes and 55 per cent favour more social spending.

auspollchart1
Source: ANUpoll on Tax and Equity, March 2016

 

auspollchart2
Source: Australian Election Study, 1987 to 2013; ANUpoll on Tax and Equity, March 2016

 

In spite of the preference for tax hikes over spending restraint, those polled preferred reduced spending in ‘non-welfare’ areas when asked about the best way to reduce government debt. When separately asked about these non-welfare areas, such as health, education, aged care and the environment the vast majority still preferred more spending to less.

……

Source and full article: http://www.austaxpolicy.com/anupoll-governments-deficit-dilemma-with-a-confused-electorate/

 

While on taxation at a national level it could easily apply to Local Government level as well.

To fully understand it a study should be done here in Auckland to see what voters might think. Given the negative reaction including from the media yesterday on Crone’s finance policy I would say the City would tend more to moderate Rates increases IF it meant better services with investment also being sped up!

 

Advertisements

3 thoughts on “Can We Tolerate an Increase in Tax (or Rates) if it Meant Better Services? #AKLPols

  1. We’ve had six years of rate increases, massive debt increases and minimal, if any improvements to services. Just because you take more money doesn’t mean you spend money efficiently. Most Aucklanders I know would prefer a reduction in rates increases. There are plenty of bits of wasteful spending like a rainbow committees et cetera that would easily allow rates to stay stable whilst spending is more focused on what REALLY needs to be done.

    1. Some have had rates increases while others have taken decreases (such as the area I am in have).

      That was always going to happen as Rates were equalised out as required by the legislation.

      With the transition complete it will be interesting to see where Rates go. If Housing values continue to run away the pain will continue to hurt.

      As for services? Yes Council needs to pull finger on this big time.

Comments are closed.