Waikato Regional Council building
“Last week we mayors were told we will run regional councils, and now we have got no money to do it.”
Rodney Dow – Otorohanga mayor
That was Ōtorohanga mayor Rodney Dow’s response after the government announced plans for a four per cent rates cap by 2029.
“I am not exactly in support of it, but I can see. Four per cent seems quite a low number. Our rates are already low,” Dow said.
This financial year Ōtorohanga increased its rates strike by 10.16 per cent compared to Waitomo’s 2.91 per cent increase.
Waitomo mayor John Robertson said he was relaxed about the proposal.
“Over the last six years our average rates increase has been just under the Consumer Price Index.”
John Robertson
Robertson said he was keen to keep rates increases low.
Local Government Minister Simon Watts announced on Monday the Government has agreed to progress a rates cap to help councils keep rates increases under control and reduce pressure on household budgets.
“Analysis suggests a target range of two to four per cent per capita, per year. This means rates increases would be limited to a maximum of four per cent,” Watts said.
“Rates are taking up more of household bills, and some communities have faced double-digit increases year after year. This is unsustainable and is only adding to the cost of living for many Kiwis.
Simon Watts
“Ratepayers deserve councils that live within their means, focus on the basics and are accountable to their community. The Government’s decision to introduce a cap on rates will support that ambition and protect local government’s social license for the long term.”
Councils will not be able to increase rates beyond the upper end of the range, unless they have permission from a regulator appointed by central government. Permission will only be granted in extreme circumstances, such as a natural disaster, and councils will need to show how they will return to the target range.
Waipā mayor Mike Pettit was not surprised to hear of the cap, but was surprised to hear how it would be implemented.
Mike Pettit
The cap will apply to general and targeted rates, and uniform annual charges but exclude water charges and other non-rates revenue.
“That’s fine,” he said. “We have got some time to implement this.”
“In 2029/30 we are sitting at just over four per cent which we will need to bring down slightly and in the current Long Term Plan sitting at 2.2 per cent for the remaining four years.”
