Wellington ratepayers apprehensive as homeowners face proposed 17% rate hike

Locals in the capital spoke to 1 NEWS about their thoughts on the proposed rates hike.

Wellington homeowners are facing a rate hikes of up to 17 per cent as the council faces multiple infrastructure issues across the city.

Mayor Andrew Foster said a 14 to 17 per cent rate increase is being proposed as part of his 2021-2031 long-term plan.

He said late last year, the council was discussing a 23 per cent rate increase but they’ve worked to reduce that.

“Different councils have different revenue sources,” he said. “Losing the airport dividend is $14 million a year - that's close to four per cent of rates on its own.

“Then there are some really unique challenges that Wellington has got.” 

Foster said about a quarter of revenue from the proposed rates increase would be spent on improving failing water infrastructure, while earthquake strengthening of the library, town hall and other Civic Square buildings after the Kaikōura earthquake, insurance costs, wastewater ‘sludge’ treatment, social housing and the ‘Let’s Get Wellington Moving’ transport project were other areas needing significant investment.

He said for an average Wellington household paying $4000 in rates, the proposed increase could be an extra $560.

“It's not a comfortable position to be in, I acknowledge that, but the community is also saying we need our infrastructure upgraded... so it's trying to make sure we focus on things that really matter and then maybe not do some of the others,” he said.

“I'm still working on the fact that we may be able to pull those numbers down and that might mean putting some other things in front of people and saying, ‘Do you want us to discontinue this?’ We certainly pushed off a number of the things that we think are not so urgent because I'm sure affordability is a really significant issue for our community.”

It comes after news the region now has the most expensive rental market in the country.

When asked why water infrastructure wasn’t adequately invested in previously through balanced rates increased, Foster said councillors had never said no to any investment requests from Wellington Water, the water management organisation owned by councils in the lower North Island.

“The question is whether they actually had the information in front of them that they needed to make the decision that we need to invest more,” he said.

“In fact I looked back and I couldn't find a single paper that said there were concerns about the state of pipes in the last nine years, the nine years going back to 2010, from anybody.” 

Foster said the council is investigating using a loan system for ratepayers to pay back increased costs at a low interest rate.

Wellington ratepayers 1 NEWS spoke to today said the proposed rates increase would hit some people hard, but the majority accepted the cost was necessary to pay for the infrastructure improvements that are needed.

“It's obviously going to be quite high for a lot of people on fixed incomes. We're in a position to be able to cope with that and I also acknowledge the councils have had their hands tied for some time particularly after the global financial crisis, a lot of central governments didn’t invest in infrastructure and so that’s probably come back to bite us, really,” one woman said.

“I don’t like it ... Having worked a little bit with the public sector, I know there's always room for cost cutting so I'm not sure about this proposal,” one man said.

“It'll be quite a big increase and I feel like most people won’t be seeing that reflected in their salaries or their incomes so it will be something that we will have to factor into our budgeting... It is quite a lot of money,” another woman said.

Local Government NZ president Stuart Crosby said rate increases are variable throughout the country’s 78 council and he’s hearing about increases of three per cent through to Wellington’s proposed 17 per cent.

“That’s not the norm that I’m hearing at this stage,” he said.

He said councils are facing long-standing issues as they are being asked to do more activities to a higher level of service, such as with freshwater management, with the same amount of funding.

“For some councils they can manage all those challenges within what you’d describe as acceptable parameters – built up reserves for a rainy day… They’re looking very hard at the whole operation to see how they can become more efficient and effective, generally by working with other councils on services.

“They’re looking hard at what they may be able to reduce in terms of services… Councils are considering options with investment in airports, ports, construction companies and they’re also looking at other sources of revenue outside rates and user fees and charges,” he said.

Crosby encouraged the public to share their views through the rates consultation process for councils in March and April, saying people power is “really important”. 

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