The $1667 chasm between Wellington rates plan and reality

Wednesday, 29 January 2025

There was a $1667 difference between what the Wellington City Council planned to charge in rates and what it now does but the pattern will be echoed around the city.

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ANALYSIS: A mid-winter return flight to Thailand or a new 65-inch TV – and from each I would get change for the $1667 chasm between the rates I was told I would pay and what the Wellington City Council now charges.

Back in early 2015, when Celia Wade-Brown was mayor, pipes were rarely in the public conscience, and the term the “coolest little capital” was used without cringing, the then-council plotted out a 10-year budget including planned rates rises each year.

Back then, and it seems almost quaint now, my city council rates were $2212 and, based on planned increases, I would be paying $3268 this year. The reality? This year, my city council rates alone are $4935. Add a $94 sludge levy and $1146 regional council rates bill to that and it reaches $6176 compared with a total of $2765 a decade ago.

In other words, the difference between what I was told I would pay in city council rates alone and what I am actually paying is $1667. Based on a quick search this week, that would be more than enough for winter return flights to Bangkok or a new 65-inch Samsung TV.

The problem is the long-term plans which councils have to create every three years. There have been three plans since a decade ago, and each has vastly underestimated the amount of rates that will be paid in later years. The difference is $1051 since 2018 and $772 since 2021. And that is without regional council rates and the city council sludge levy added in.

The numbers will vary but every house in Wellington will be in a similar situation.

The city council again did a long-term plan for 2024-34 last year, and is now having to revise it after serious ructions in the council that rounded out a horror show year in council chambers.

Already we have had the 16.9% increase (or 18.5% with sludge levy) in that plan. In this plan, increases are front-loaded with most of the big rises in the first years then tapering off steadily as time progresses.

In other words, the current council has loaded the big increases for now and coming few years – the times when costs are vaguely predictable. But they are taking a punt that future councils will do what none have done in years and stick to a plan made by long-gone councils.

This is not to moan about my current situation because, after all, I have been in work for the decade in question and get paid more now than I did in 2015 – something not all can say.

And it is not to criticise the council. There are reasons that rates increase more than expected. This round it was the pipes, insurance and cost blow outs (and, yes, some pet projects) but in the past there have been unexpected costs. Let’s not forget the sudden realisation that we may need to be better prepared for earthquakes in this quake-prone city.

A recent burst pipe in Wellington epitomises one of the recent council spending crunches.

We have had social housing stock that was well past its use-by date, we have tried to adapt for climate change, we have a new convention centre, all while trying to keep the city liveable. These are mostly things that are hard to argue against.

But it is to say that if I was to buy a house now, I wouldn’t be budgeting on the 4-5% increases planned for the final six years of the current (under-revision) long-term plan because the only thing that can be expected is unexpected costs.