Winners and losers: Rates rises sweep the country

Friday, 15 March 2024

Double digit rates increases are being proposed up and down the country as council budgets are stretched.

This could see the average homeowner pay about $8 more per week, according to Local Government New Zealand (LGNZ).

High interests rates, growing infrastructure costs, and rising insurance prices are leading councils to pass costs onto residents.

“Councils are acutely aware they need to balance the need for investment with affordable increases but the pressure has reached tipping point,” LGNZ vice-president and Lower Hutt mayor Campbell Barry said.

Councils across Aotearoa collected $7.97 billion from rates in the year to June 2023, according to Stats NZ. That was up from $7.36b a year earlier, and $6.74b in the year to June 2021.

Rates increase have been widespread, but some places have been hit harder than others.

Losers

Hamilton

Hamilton residents are set to see a steep rates increase.

City councillors in February voted for a proposed average rates rise of 19.9% for the next financial year, according to the Waikato Times.

That number was brought down from a 25.5% increase proposed in November.

At 19.9%, the average Hamilton household would have to pay about $10.90 more towards rates every week.

The rates rises are also expected keep coming, with the city projecting rises of 15.5% for the four years following.

Wellington

Those in the capital are facing a potential 16.4% rates increase, The Post reports.

That number, proposed last week, is up 1% from what was budgeted a month earlier, a 15.4% rates increase.

The proposed rates increase was necessary to fund the services and infrastructure Wellington needed “to be a thriving city”, Wellington mayor Tory Whanau said.

Whangārei

The Whangārei District Council has proposed a record high 17.2% rates increase, almost double that of its previous highest increase.

The council's previous highest rates increase was 9% in 2015/2016, according to RNZ.

Whangārei mayor Vince Cocurullo said the main causes were inflation; rising construction, interest and insurance costs; depreciation and growth.

Dunedin

From the Far North, to the deep south, double digit rates increases are on the cards for many.

In Dunedin, rates are proposed to rise 17.5% in the next financial year.

The proposed rate increase would be higher for residential, a 19.4% increase, compared with commercial (13.6%), and lifestyle (16.3%).

Mayor Jules Radich acknowledged “how upsetting this will be for ratepayers”.

Napier

Napier ratepayers are looking at the highest ever proposed rates rise, a 23.7% increase.

Napier City councillors on Thursday signed off on consulting on the proposed increase, which Mayor Kirsten Wise noted was originally going to be 47%.

The increase is due in large part to the need to improve ageing infrastructure.

Winners

Ōpōtiki

Rates are rising in Ōpōtiki, but by only about a third as much as they could have.

Ōpōtiki District Council reduced it’s proposed rates increase of 34% down to 10.5%, according to 1News.

The reduced increase could come with a different cost, however, with councillors proposing cuts to library hours, event funding and the servicing of parks and reserves.

The proposed rates increase would be adopted as part of the council’s of Long-term Plan, which has been differed until September 30.

Auckland

Of New Zealand’s main centres is proposing the lowest rates rise with a single digit increase.

Auckland councillors in December agreed to send a draft Long-term Plan out to public consultation with a proposed average rates rise of 7.5% in the 2024/2025 financial year.

A do-less-pay-less option of a 5.5% rise, or a pay-more-get-more option of a 14% rise are also going out for public consultation.

However, Aucklanders could face a 25.8% rise in water charges from July 1, or $29 per month for the average household.

Are councils doing enough to keep rates down, or are the rates increases money well spent? Let us know in the comments.