Government Road Reform

Who will pay for Roading Reforms?

In Christchurch, around 20 per cent of residential rates is used to maintain and develop local roads. However, ratepayers should not expect a 20 per cent saving as the Council would still have responsibility for a number of activities associated with roads, including maintenance of features such as footpaths, grass berm areas, malls and other amenities. A 15 per cent residential rates decrease would be more likely if the Government goes ahead with its proposals. Coupled with a 16 per cent increase in South Island petrol prices, some Christchurch people would be better off, while others would be worse off. Those who rent and those who use a lot of petrol would be worse off. Those in high value properties and those who do not travel great distances on the roads may be slightly better off.

WORK IT OUT FOR YOURSELF
- WILL YOU BE BETTER OR WORSE OFF -

How much do you pay in residential City Council rates each year (ie exclude the 15 per cent portion of your total rates payment which goes to the Canterbury Regional Council)?

This is the amount your rates will be reduced if the government reforms are put in place. Note: if you rent, your landlord pays your rates. If the roading reforms go ahead, your landlord may or may not pass these savings on to you. Since the savings will probably only amount to a few dollars per week, your landlord may feel that it is not worth cutting your rent, and you will therefore receive no saving. For you, figure A is zero.

How much do you spend on petrol each year?

Multiply this by 16 per cent - the amount Christchurch petrol prices will increase if reforms proceed as proposed.

If Figure A is greater than Figure B, you would be better off if the Government’s reforms go ahead.

If Figure B is greater, you would be worse off.

The difference between Figure A and Figure B is the annual cost or saving that you will experience of the government proceeds with its plans for our roads

	Joan and Laurie live in St Albans. Their home has a government valuation of $140,000, which means they pay $14.09 each week in City Council rates. They own and drive a 1988 Ford Laser which covers around 10,000 km each year. Under the reforms their weekly rates bill would drop to $11.98, but their weekly spend on petrol would increase by $2.27. Overall, they would be 16 cents worse off each week.
	Claudio and Patricia live in their own $400,000 Bryndwr home, paying $37.08 each week in City Council rates. With children David, Anna and Mark the family runs five cars: a 1987 Barina which covers around 20,000 km each year, a 1984 Bluebird which also covers 20,000 km, a 1992 Galante which travels around 30,000 km, a 1991 Hilux which travels around 12,000 km and a 1981 Mitsubishi Sapporo which covers around 25,000 km. Under the reforms their weekly rates bill would drop to $31.52, but their weekly spend on petrol would increase by $24.31. Overall, they would be $18.75 worse off each week.
	Bruce and Sue own a $145,000 home in Somerfield where they live with children Georgina and Sean, paying $14.52 each week in City Council rates. They own a 1989 Lancer which travels around 18,000 km each year and a 1982 Honda City which covers around 12,000 km. Under the reforms their weekly rates bill would drop to $12.34, but their weekly spend on petrol would increase by $6.25. Overall, they would be $4.07 worse off each week.
	Margaret and Mike rent a $140,000 house in Bromley where they live with daughters Sinead, Chelsea and Courtney. On a property of this value, their landlord pays $14.09 each week in City Council rates. The family owns a 1985 Toyota Town Ace in which they travel around 15,000 km each year. Under the reforms their landlord would pay $2.11 less in rates each week, which may or may not be passed on to Margaret and Mike. They would have to spend $4.15 more on petrol each week. Overall, they would be worse off. If their landlord passed the rates reduction on by reducing their rent they would be only $2.04 worse off, but if their landlord did not pass on the reduction, they would be $4.15 worse off each week.

If these families lived in Auckland, the situation would be different as they would only experience a five cents per litre petrol price increase. If the costs were to be spread evenly across the whole country, they would be different again as the increase would be only seven cents per litre, not 13 cents.