I want to be open with Aucklanders about the financial reality our city faces as a result of the Covid-19 crisis and lockdowns. This year will be challenging and our revenue loss substantial.
About 40 per cent of Auckland Council's income comes from rates, and the other 60 per cent comes from non-rates revenue like dividends, public transport fares, parking revenue, processing consents, income from running events and facilities and development contributions. All of these sources of income have been severely affected by COVID-19 and will continue to be for some time. As a result, we have tough choices to make as a city about the services and activities the council will be able to support.
During the past month, I know that many of you will also have spent considerable time coming to grips with COVID-19 and the impact this unprecedented situation has had on your business and household finances.
I know this tough reality is one none of us could have predicted when we rang in the new decade just four months ago.
To those of you waking up to a new financial reality: you are far from alone. We stand with you.
We know many of you are hurting and will continue to be hit hard by financial instability after COVID-19. We know many businesses are suffering because of forced closures and we are acutely aware of the financial stress that bills such as rates payments will have on you, your family and your business.
I want you to know that we are listening. We care about Aucklanders and we will take action to help you. I plan to write openly in the coming weeks to reassure Aucklanders that we are considering everything, and everyone, in preparation for the difficult financial decisions we face as a council. This includes explaining the measures we are taking to cut costs to manage the financial impact of Covid-19.
Today though, I want to touch on rates relief.
Before this crisis, we consulted on an annual budget for 2020/21, which would provide the basis on which we would set rates. So much has changed in the few short weeks since then. The financial landscape has changed almost beyond comprehension. As a result, we find ourselves requiring a very different budget — one that responds to the emergency we are now facing.
Already we have taken decisive action to support Aucklanders in the immediate future, starting with how we approach the next rates payment, the last one for this financial year.
To provide immediate relief and support to everyone, including businesses, struggling because of COVID-19, we are using the tools already available to us to offer all ratepayers the chance to pay this last instalment later than normal if they need to, without penalties.
Guidance on how you can request to defer your May payment will be included in your next rates notice, as well as information on assistance schemes you could be eligible for that are designed to help those in need.
We also acknowledge the struggling accommodation sector and the hardship you face as a result of a depleted tourism industry. To recognise the fall in spending in this area and to help lessen the burden we will be waiving the payment of the Accommodation Provider Targeted Rate from April 1 to June 30 this year.
In the coming weeks, we will consider how we further target rates relief to those in need for the upcoming financial year. We want to ensure we can support businesses and families that are struggling to pay rates. To do this, we are proposing to revise our rates postponement policy. We also propose suspending the Accommodation Provider Targeted Rate until March 31, 2021.
You will have an opportunity to share your thoughts on proposed rates relief options in the following weeks (keep an eye out for consultation dates, which will be published soon). I encourage you to take part in this process to help inform the tough decisions we will need to make by the end of July. What I want to make clear is that as we move through this process, you are our priority.
We will help those financially affected by this crisis and we will keep this city going.
Desley Simpson chairs the Finance and Performance Committee on the Auckland Council.