Every Wellington council on rates cap crash course, mulling what to cut
Wednesday, 3 December 2025
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Councils around Wellington have found themselves on a collision course with a looming rates cap as mayors warn of more potholes, shabby streets and public transport cuts.
Councils in the last triennium set their 10-year budgets, including how much they predicted rates to increase each year. Every single Wellington council has front-loaded the big increases in the early years.
Historical Wellington City data shows later years’ rates increases in long-term plans are routinely underestimated, with actual increases significantly greater than planned.
Now a Government-imposed rates cap, implemented from 2027 to 2029, will set minimum increases of 2% and a maximum of 4% unless special permission is granted. The limits will be reviewed about every three years.
It means every Wellington council will have to find ways to save money, or make more without a direct rates charge.
Read more:
12% rates hike confirmed: But Wellington City finally has plans
Pay rises for all ‒ and ground shifting changes ‒ on first Wellington City Council agenda
Kāpiti, Porirua and Greater Wellington councils are the closest to hitting the target but Kāpiti would be 7% every year if it choose to repay debt. Wellington City misses it every year, bar one year when it is exactly 4%. Hutt City rates increases are never predicted to drop below 7% while Upper Hutt post-2029 is a roller coaster between 1.82% and 6.94%.
Porirua mayor Anita Baker slammed the rates cap as a “blunt tool” but said the council would abide by the law.
“Our cost pressures aren’t grocery prices — they’re asphalt, steel, pipes and construction. A rates cap doesn’t make any of those inputs cheaper,” she said.
“It risks pushing councils back into the same short-term thinking that created decades of under-investment and the maintenance backlogs we’re only now beginning to address. In the end, it means more unfilled potholes, more shabby streets and more broken pipes.”
Greater Wellington transport committee chairperson Ros Connelly said the only way to keep under the rates cap would mean “drastic” cuts to public transport.
“We could see increased public transport fare increases and user charges imposed on lower income families, we will see risks being individualised and downgraded, and asset renewals being pushed onto future generations where they become more and more unaffordable,” she said.
Regional council chairperson Daran Ponter said a cap would also diminish the council’s ability to borrow to get work done.
Upper Hutt mayor Peri Zee said there was little fat to cut in council spending, so rates capping could see the council increasing costs for services or not fixing potholes.
“I am concerned that the impact of rates capping will only push the problem onto our kids’ generation,” she said.
Wellington mayor Andrew Little said it was clear the council needed to get spending under control. This was already being done via the new Revenue and Financial Value Review working group and a recent Deloitte report into better cost effectiveness and improved productivity.
He would not say what could be cut, though the Deloitte report last week found the council had 330 surplus staff and money could be saved through areas such as automation, digitisation and reducing duplication.
Hutt City mayor Ken Laban did not say what could be cut but said the council would seek to “ease the cost of living pressures”.
Kāpiti mayor Janet Holborow said the council worked hard to balance “ keeping rates low with investing in growth, ”but unavoidable costs mean tough savings ahead and difficult conversations with communities“.