Future Wellington rates rise forecast ‘eye watering’
A Wellington home owner who paid $4000 in rates last year will be getting a $11,035 annual bill within the decade, Wellington City Council figures show. A councillor warns the projected increase is “likely conservative”.
The Wellington City Council is considering an 18% rates increase, including a levy for a new sewage plant, for the coming financial year with projected rates rises of between 7.2% and 15.5% in the following years. The power of compounding means the 10-year increase, including the sewage plant levy, is more than 175%.
The council is facing a finance crunch as the city’s ageing pipes break and big spends – including an overblown Town Hall project, the library, and a revamp of the Golden Mile – keep mounting. It is planning to increase its annual rates income from $481 million now to just over $1 billion in the 2033 to 2034 year. Mayor Tory Whanau said about half the forecast rates increase was to fix water infrastructure, which was an issue “simply too big for Wellington rate payers to shoulder on their own”. She would lobby central government for help.
“We’ve worked hard to keep our rates as manageable as possible for households and businesses. That includes tough decisions like demolishing the City to Sea bridge, phasing the Golden Mile and reducing some of our services.”
City Missioner Murray Edridge said housing affordability was already the prime reason people needed help and increasing rates, which would get passed on to renters, would worsen the issue.
Landlords would need to look at whether they could absorb some of the new costs, he said.
“Even a small increase is catastrophic.” Councillor Nicola Young said the projections were “terrifying” for residential ratepayers, and more so for commercial ratepayers who paid a higher rate. The council had to rein in its spending, she said.
“Wellington is already becoming unaffordable and these increases will drive people away.”
Councillor Ben McNulty said the projections were “eye-watering and likely conservative” as they did not factor in all the money Wellington Water needed to fix the city’s pipes. “Council may well be forced to do less but [it] also cannot only cut its way out.”
He backed changes, suggested by Auckland mayor Wayne Brown that the Government should return GST on rates to councils, while councils should be able to adjust fines and penalties, introduce congestion charging, and make the Government pay rates on its buildings.
“Without those reforms it won’t matter where in New Zealand you live, the cost of rates will make property ownership unaffordable for anyone on a fixed income.”
Councillor Iona Pannett said it would get to the point people could not afford to pay rates and, while other funding mechanisms
“Wellington is already becoming unaffordable and these increases will drive people away.”
Nicola Young, Wellington City councillor
could be considered, it still all came from public money.
“It is going to get more expensive with the infrastructure deficit, climate change and insurance,” she said.
Councillor Ray Chung said the council could keep rate increases down by cutting back on wastage and time spent on “fruitless projects such as the now-defunct Reading Proposal and the [still-planned] Golden Mile project”.
Councillor Diane Calvert said the figure in 10 years was probably “well under” what it would be.
“The council needs to dig deeper to find better ways to cut costs and or increase revenue,” she said.
Ellen Blake, from the Mt Victoria Residents Association, said the increases would hit residents, particularly super annuitants and beneficiaries, hard.