Our challenge to keep rates affordable
The cost-of-living crisis affects everyone, and council is no exception. Even though Councils are raising rates, debt is rising faster than our revenue streams. We know this is unsustainable, which is why we’re advocating to central government to change the way Councils are structured and funded.
Council has adopted our Long-term Plan which sets out our vision, plans and activities over the coming 10 years, (reviewed every 3 years) and by now you will have received your first instalment of rates for this new financial year.
The cost-of-living crisis affects everyone, and council is no exception. It’s become significantly more expensive for councils to deliver everything our communities needs and wants, with increased costs to manage growth demands, replace aging infrastructure, climate and resilience events, interest rates, insurance, and depreciation - all which are key contributors to rate rises. Even though Councils are raising rates, debt is rising faster than our revenue streams. We know this is unsustainable, which is why we’re advocating to central government to change the way Councils are structured and funded.
Councils' share of the country’s overall tax revenue has remained at just 2% of GDP for the last 50 years, despite our ever-increasing responsibilities. Councils are required to do a lot more by central government without getting any additional resources or funding to do this work. Infometrics estimates an average Kiwi household pays around $2,900 a year in rates and $37,000 in tax. There should be a fairer division of money between local and central government, and central government should work with councils on a range of ways to make money, and share some of that chunk of change with local councils.
While it’s more efficient to deliver certain things centrally (e.g. police, education, health and our defence force), many things are better delivered by local councils – who know the wellbeing and needs of our communities far better than central government does.
Our key challenges to manage are: affordability, providing for growth and a changing population, resilience and climate change, reconsenting of infrastructure assets, the changing regulatory environment and the impacts of national direction on land use. Our Council has made some hard calls about not fully funding depreciation on some assets and made informed assumptions that the planned budget is sufficient to cover current levels of service, with some key projects moved out to later years, to balance the funding required.
It is a fine balancing act between a growing population meaning total rates needed are spread across more rating units, softening the burden for all ratepayers and ensuring Council can install and manage the core infrastructure needed for sufficient capacity and connectivity to achieve our growth potential.
There is great opportunity for more collaboration of local and central government through exploring new ways of working together and partnering to ultimately get better value for our limited funds. Our Council is a strong advocate for change: embracing innovation, trying different approaches, improving processes and outcomes etc. but this needs equally strong support and willingness from central government to make it happen.
