Like every other council around New Zealand, we are facing rising costs.

For decades Council has been successful in managing finances prudently, such that rates increases have stayed below 4%. However, times are tough, the world has shifted since our last long term plan and our district is facing some really big challenges. Funding demands on local government is exceeding what it is capable of achieving and we are not exempt. This has created a funding gap we now need to close.

The need for the continued provision of three waters services to our communities, following the recent repeal of three waters legislation, is having a significant financial impact. The proposed rate increases reflect that.

The rates reality

The reality of cost increases, impacts of inflation, our previous decisions and investment in infrastructure means some dramatic increases for the future.

Rates are one of the most important sources Council uses to fund the cost of its services. We are continually being asked to cut costs but keep delivering the same or better services, and we have unavoidable cost drivers. We are dealing with high inflation, high interest rates coupled with rising compliance and insurances costs.

Once we included all our costs in our budgets, we looked at the rates increase. Of the approximate $15M in required increases, $12M is attributable to three waters expenditure. The pure rates increase, once we had incorporated the required water expenditure, was 45% which is unaffordable. Council considered this unsustainable and looked at possible solutions to mitigate this huge increase.

The only option we had available to us was to borrow in years 1 & 2 and repay this money in later years of the Long Term Plan. This resulted in rate increases of around 20% for the first three years.

Who pays and affordability

One of the important aspects we must consider when setting rates is affordability and who pays. In our widespread rural district we have a relatively small population with a lot of infrastructure to maintain, especially for the core services of three waters and roading. Council has the responsibility of getting the best mix possible, using rates, borrowing, reserves and our investment income.

We have identified some major projects which are compulsory and must be addressed, along with projects we have committed to that will improve our community facilities.

Rates rebates

Council continues to subsidise rates for everybody from investment returns to a limited extent ($800K in 2023). With rates forecast to increase above 20%, the impact on discretionary income on low-income ratepayers is disproportionate to those ratepayers with more income.

The Rates Rebate Scheme paid by the NZ Government has a maximum rebate of $750 which does not increase any further as rates increase.

Should Council provide an additional rebate of $250 for those receiving the maximum government rebate to lessen financial hardship for vulnerable ratepayers? This would cost $160k and be budgeted from investment returns in the same way that the current subsidisations are.

Tell us what you think using our submission form.