Massive rates hike of 25.5% now on the cards for Hamilton residents

Thursday, 30 November 2023

Hamilton city councillors have voted for a whopping proposed average rates jump of 25.5% for the next financial year, way above earlier steep suggestions of rises in the teens.

The draft budget outlining the proposal is aimed at biting down on borrowing by balancing spending and revenue quicker, while maintaining current services.

The 11-2 vote in favour of consulting the public on 25.5% went through on Wednesday night as councillors came to the end of two days of discussions on the 2024-34 draft long term plan.

After earlier agreement on additional spending, mayor Paula Southgate had moved an 18.6% rise for the first year, followed by two years of 15.2%. That would balance the books across three years according to a council measure.

A council statement on Thursday said this would have added $9 a week (approximately $468 a year) for a “median ratepayer”.

But councillor Ewan Wilson countered with an amendment to consult the public on raising the first year increase to 25.5%, with rises of 12.9% and 8.7% in the next two years.

The council statement said 25.5% would add $13.90 a week ($722 a year) for a median ratepayer.

Pointing to what he called a decades-long addiction to spending at the council, Wilson said on Thursday he and a group of supporters had failed in a bid to either cut or delay about $100 million worth of spending, mostly over the plan’s first three years.

Therefore a higher rate of 25.5% was needed to help balance the books - using a Government-mandated measure of day-to-day costs being met by revenue - in year one of the plan period.

He said his 25.5% option would save $3 million in borrowing-related interest costs next year compared to the mayor’s proposal

Southgate told the meeting she was worried about the extra costs 25.5% would impose on ratepayers.

But Wilson and councillors Emma Pike, Kesh Naidoo-Rauf, Anna Casey-Cox, Moko Tauariki, Sarah Thomson, Mark Donovan, Andrew Bydder, Geoff Taylor, Maxine van Oosten and Louise Hutt supported his amendment as the substantive motion.

Southgate and deputy mayor Angela O’Leary voted against.

Asked on Thursday whether she was disappointed at her motion not being carried, Southgate said: “I see the pros and cons of both measures.

“There’s always wins and losses in politics. At the end of the day it’s democracy.”

But she said there was lots of water to flow under the bridge yet and she expected a “vociferous reaction” from the public over the suggested rise next year.

At the meeting, Southgate noted all metropolitan councils were facing “double-digit” rates rises and that 18.6% would be “incredibly hard for many” in Hamilton.

While no-one wanted to hand big rates rises to ratepayers, Southgate said: “We cannot run our city into the ground.

“We can’t keep kicking the can down the road to future generations” through borrowing, she added.

Both she and O’Leary were keen to see more central Government funding coming in to help the city meet obligations proposed by Wellington.

Wilson told the hui his proposed rise would help end reliance on borrowing quicker.

“My amendment addresses that in year one … it is more fiscally responsible.”

Councillor Taylor agreed on action to reduce debt. “We can’t keep borrowing to mask the problem.”

Councillor Tauariki said he was keen to get the debt “monkey” off the council’s back and felt 25.5% “gives us an opportunity to be more resilient”.

Finance and monitoring committee chairperson Maxine van Oosten noted one pressure on budgets was Hamilton’s desire to be a “cool” city to help boost growth.

But she noted “that costs money”, meaning a tough balancing act for the council.

Meanwhile, the city is also considering targeted rates to invest in the likes of sports grounds and responses to extreme weather events.

Correction: An earlier version of this story said the rates vote was won 8-3. The vote went through 11-2.