‘People are hurting out there’: 18.5% rates rise for average Wellingtonian

Friday, 28 June 2024

Despite ongoing drama about the sale of the airport, Mayor Tory Whanau had the support of eight colleagues and the 10-year plan was voted through.

Double digit rate rises locked in after a stormy Wellington City Council debate will see rates double within 10 years - causing more pain on top of the cost of living crisis.

Rates rises of 18.5% (including a special levy for the state of the art sewage sludge facility) were voted through by the council. For the average household, paying rates of $4000 a year, year one will add an additional $700 on the rates bill from July 1.

But that won’t be the end of the pain - with further rates increases now locked in for the following years, that $4000 rates bill will soar to $5956 by 2026 - more than $100 a week - and $8622 by 2034.

“Older people are going to have difficulty paying an extra 18% on top of their rates, especially those on limited incomes,” said Colleen Singleton, president of the Wellington central Grey Power branch.

“Forty percent of superannuitants only have superannuation as their income stream. Those people will be affected greatly, especially if they are homeowners.”

But it seems there is no escaping double-digit rates rises. In Upper Hutt the council approved a 19.9% increase and Lower Hutt voted for 16.9%. Porirua approved 17.5% and in Kāpiti it’s 17%.

Councillor Nicola Young said Wellington council’s rates increase was “not sustainable” for many households. “We are doing too much and this is not resilient for Wellingtonians,” she said.

Ray Chung, who has been pushing for lower rates throughout his time on council, urged his colleagues to focus on bringing down the rates rather than broader societal issues like climate change.

“These are things that we can control. We can control the rate increases we can control the extra burden that we actually give to our ratepayers.”

Diane Calvert attempted to get through an amendment to lower debt levels over the next year and bring the council under its self-imposed debt limit, 225% of revenue, by 2025.

“What I'm asking is that we actually abide by our financial strategy,” she said.

People are hurting because of rising costs, says Diane Calvert.

“Because people are hurting out there. People are losing jobs. People are having their homes go up for mortgagee sale, and we actually have to do our best. We can’t keep spending money.”

She was voted down by a majority of councillors, who spent more of the debate arguing about the sale of airport shares than the impact of rates increases.

Other councillors viewed high rates as a necessary price to deal with the financial challenges facing council, which were in part caused by historically low rates.

“We have been not paying enough collectively. We’ve been riding on the back of investments made in the 1930s and the 1950s,” said Sarah Free.

“Our generation is going to have to pay more rates, but other generations have had heaps more tribulations. They've had to go to war, they’ve had massive depressions, they’ve had pandemics which have killed masses of people.”

Mayor Tory Whanau is proud of how the plan has turned out.

Rebecca Matthews said looking at councils around the country, the rates rise struck in Wellington was near the average.

“If anyone is going to come after me and say ‘You’re addicted to spending,’ or ‘This is a Wellington City Council problem,’ it is not.”

“We are addicted to spending, councillor Matthews,” replied Tony Randle. He said he took no comfort in the fact that the rates increase were only “very high” instead of “very very very high”.

The original forecast of rates rises showed they could climb well over 20% if spending was not reined in.

All up, the long-term plan included $5 billion of capital spending and $11.6b of operational spending.

The major budget lines include renovating social housing, upgrading and repairing the pipes, building bus and bike lanes, and rebuilding the Central Library and Town Hall.

“Our future can be thriving and exciting. I am proud of where we landed today and thank Wellingtonians for helping to guide us on this huge decision for our city,” said Mayor Tory Whanau of the plan.

CORRECTION: A previous version of this story said rates would reach $11,000 by the end of the long-term plan. That was based on an old rates forecast and no longer reflects the council’s forecast. (Updated at 7pm, July 10, 2024)