6 May 2024

Councils need more revenue options amid double-digit rates rises

From Nine To Noon, 9:04 am on 6 May 2024
Sam Broughton, Selwyn District Mayor

Photo: RNZ / Angus Dreaver

More than 80 percent of councils around the country are planning a double-digit rates rise this next year. With nearly one in five either above, or hovering just below, a 20 percent rates rise.

Wellington City Council's draft ten-year plan envisages a doubling of homeowners rates bills, within a decade. Councils face a $52 billion infrastructure deficit - accordiing to the Infrastructure Commission - and higher rates rises are expected to be the norm for years to come.

This at a time when many councils are already pushing debt to income boundaries.

A deal over the weekend will mean Watercare in Auckland can spread investment debt over a longer period easing the cost pressure in the short term.

But there are questions about how and if this kind of deal could work for all councils. Local Government New Zealand president and Selwyn District mayor Sam Broughton says the funding system for councils is broken and they need more options outside of asking ratepayers for more.

Infometrics prinicpal economist Brad Olsen says one idea - not being entertained by Government - is to return GST on rates to councils, which would cost $1.1 billion.