Hope for ‘warts and all’ report as $2.1b Wellington debt looms

Monday, 2 June 2025

The Wellington City Council’s debt has quietly sailed beyond $1.5 billion with the city’s next mayor and council predicted to inherit a ledger book more than $2b in the red.

The council’s new chief executive, Matt Prosser, will by mid-July put out a pre-election report, a statutory requirement for all councils so candidates know the challenges and opportunities they are campaigning to take on.

Councillor Diane Calvert hoped for a “warts and all” report, with Prosser having no history to defend.

“It is now time we have to be open with everyone and say the uncomfortable truth,” she said.

Calvert ran the numbers and got them verified from council staff, showing that in June 2022, the year the current council took over, there was $944 million in debt. It hit $1.4b in 2022 and was forecast to reach $2.1b next June. A council agenda this week says the debt was $1.55b at the end of March.

The council had 80,809 residential and commercial rating units, according to 2024 data, meaning that by this time next year, the debt next year will equate to nearly $26,000 per ratepayer or $10,000 for each of the 210,000 men, women and children in the city.

Mayoral candidate Andrew Little said the figures showed what many long suspected – that the council needed a tighter rein on its finances.

“If elected, I will review all major projects in the pipeline to ensure there is value for money, and I will ensure council’s operational spending is tightly and responsibly managed,” he said.

He planned to set up an external capital advisory group – made up of construction, engineering and project management professionals – to make sure projects were well-managed and to reduce the risk of blow-outs.

Mayoral candidate Karl Tiefenbacher said council’s financial decision making had been “atrocious” for a decade and left the city burdened for decades with significant issues.

“I will insist on an audit of all procurement and delivery processes to find where we can make immediate savings and pause all non vital projects,” he said.

Ray Chung, a current city councillor running for mayor, said the level of debt was “crazy” and costing the council $2m a week to service.

“The best way of reducing debt is to stop spending and this council isn’t doing that,” he said. “I will do this.”

Calvert said she had spent this term and the last raising concerns about council spending and how it failed to meet expectations of Wellingtonians.

“In 2023, I warned that the city was heading toward a financial crisis,” she said.

“That prediction has unfortunately come to pass.”

Councillor Nicola Young said council decisions were pushing the city into a “financial abyss”, which was “terrifying”for those who wanted to stay in the city.

Barbara McKerrow, the council chief executive in 2022, highlighted in her pre-election report that the council had raised its debt to income ratio from 175% to 225%. But even then, just before the current council came in, the debt was only scheduled to hit $1.6b by 2031.

“Our current level of debt is less than many local authorities,” McKerrow wrote at the time. When S&P lowered the council’s rating in 2024, it noted Wellington’s “rapid accumulation of debt in the last five years is an outlier among similarly rated peers globally”.

Neighbouring Hutt City, with just over half the population of Wellington, expects its debt to peak in five years’ time at $1.1b. S&P’s 2024 look at Porirua City Council put the city’s debt at $339m in 2025. Porirua’s population is about 63,000 versus about 210,000 in Wellington.

Mayor Tory Whanau and councillor Rebecca Matthews – who chairs the long-term plan, finance and performance committee – were approached for comment.