Wellington warned of 'unprecedented' rates rises

Monday, 13 November 2023

Councillor Ben McNulty says rates rises will be ‘unprecedented’ if big further savings are not found.

Wellington City councillors have been warned their proposed cuts to the capital’s budget are not enough and they can expect the next rates increase to be “unprecedented”.

Figures cited by council sources for the next rates rise range from 15% to 20% with general agreement that council staff will consider cuts already proposed then return to council early next year with an ultimatum — make significant further cuts or impose another hefty rates rise on Wellington.

Councillor Ben McNulty could not give a figure for the possible rates increase, given in a councillor-only workshop, but said the figure would be “unprecedented”.

Cost blowouts saw the councillors going through the council’s long-term plan with a fine-tooth comb last week to see what could be removed. While a number of items were removed, McNulty said councillors had been warned that some big ticket items would have to go when the plan was reconsidered and put out for public consultation, in February.

Councillor Sarah Free said the council still had to make “painful decisions”, with one option looking at the amount spent on heritage protection such as the Opera House.

The past three years have seen average rates increases of 12.8%, 8.8%, then 12.3%. The increase will mean a household that paid $3081 in the 2021/22 year now pays about $4229 in rates but this would go up to $5074 next year with a 20% increase. The council is trying to keep rates rises between 5% and 8% for the next 10 years.

Councillor Sarah Free said the council still had to make “painful decisions” around spending. She suggested a scaled-back version of the pedestrianisation of Lambton Quay and taking a hard look at the amount spent on heritage protection such as the Opera House.

Councillor Diane Calvert last week said required cuts were going to be tough but so too were rates increases “If we don’t deal with the issues we are confronting.

“The council is facing a financial crisis but let’s start dealing with the rocks first, not the pebbles,” Calvert said.

Councillor Iona Pannett said Wellington was a wealthy city in a wealthy country but people, even on good wages, were now having to cut corners amid growing living costs. Big cuts to core services were a “neo-liberal” idea and not what the council should be doing.

“We are not a council that is not going to invest in the city,” Pannett said.

Councillor Tim Brown said the council could save money by pushing out the time line of planned projects. Th

Mayor Tory Whanau said speculating on rates rises would be “inaccurate and imprudent guesswork that is not grounded by evidence” and the council was only half way through the 18 months of creating its long-term plan.

'What we know right now is that we have a lot of external financial pressures bearing down on us, like other councils across the motu, and that we will need to adjust and rephase some of our work programme to stay within our debt limit.“

Past draft budgets have come out with similar initial big rates increases, which has meant councillors having to find more savings. The 2021-22 budget was initially going to see a 23% increase until it was scaled back to 12.3%.

What has the council voted to save?

The budget will provide $3m to upgrade the Ōtari-Wilton’s Bush plant nursery, $1.7m for Huetepara Park in Lyall Bay, an upgrade of Grenada North Park, and $1m for new playgrounds. All of these projects were getting the axe in the original proposal. The Karori Event Centre fit-out will be paused, but the council will not investigate selling the building.

What has the council voted to cut?

The council voted to cut $170m from the budget for Civic Square and the City to Sea Bridge, and to investigate whether the bridge, basement and former Capital E building could be demolished. It also cut $25m allocated for transitioning the city’s swimming pool heaters from gas to electricity.