Water rates fire stoked again

Thursday 14 May 2009

The National government is not ruling out the privatisation of Auckland's water services, the outcome of which will have a huge impact on landlords.

By Vicki Holder

In parliament last week the Prime Minister said: "In the end, as with every other local body in New Zealand, the decisions about local body assets are made by the elected representatives of the people who live in that local body area."

However Green Party Co-Leader Russel Norman believes the decision will not be left up to Aucklanders.

"The Government's privatisation agenda for Auckland has been laid bare, as they would not promise to keep legislation that protects Auckland assets," he said.

Currently, landlords and tenants have to come to their own agreement about how water bills are paid. It happens in Auckland and Nelson, but other regions are looking at adopting a ‘user pays' system for water.

Property commentator Andrew King says Norman is just creating a platform to score political points in raising the issue of whether the government intends to sell off Auckland's water services, but that privatisation would actually be good for landlords.

If it went ahead, water bills for rentals would be sent to tenants only. At the moment, water services are owned by the local authority, so the council can choose who they send the bill to.

"If it's hard to track down the tenant, they can send it to the landlord and it will be paid. They use the landlord to mitigate potential for losses. If the service was sold off, that facility would be gone. A private company wouldn't have the protection of the local authority act."

King says the New Zealand Property Investor's Federation (NZPIF) is going to try to overturn the current system.

"They've rewritten the section of the Residential Tenancies Act dealing with who has responsibility for outgoings as it was a grey area that used to be hidden in rates. It's just like any other utility. It's become a political football."

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