60% rates rise proposed

It’s not uncommon for mayors and councils to play down rates rises. Like this:

Wellington Rates Snippet.png

Gwynn Compton:  Spin cycle shrinks rates as well as clothes

But for Wellington City Council, an attempt to spin the merits of reducing a potential 7.1% rates rise down to 3.9% has ended up with an announcement that they’re reducing rates down to 3.9%, which would be a 96.1% cut!

In this case, the words “rise” or “increase” appear to have been omitted from the article.

In contrast, in the ODT today:  Rates must rise to maintain momentum, mayor says

Dunedin faces a 7.3% rates rise as the Dunedin City Council eyes a decade of increased investment, but Mayor Dave Cull says it is essential for the city to keep riding a wave of activity.

Mr Cull was commenting before today’s start of public consultation on the council’s latest 10-year plan, which outlined proposed spending for the decade to 2028.

However that is a bit misleading too – the 7.3% rise is proposed for the first of ten years. More detail:

Rates would rise by 7.3% in the 2018-19 year,
by 5% the following year,
and by 4.5% each year
until 2027 when the increases would drop to 4%.

That amounts to about 60% over ten years.

Modest rates of $2000 would rise to $3190 after ten years.

2018   2,000.00
2019 7.3%   2,146.00
2020 5.0%   2,253.30
2021 4.5%   2,354.70
2022 4.5%   2,460.66
2023 4.5%   2,571.39
2024 4.5%   2,687.10
2025 4.5%   2,808.02
2026 4.5%   2,934.38
2027 4.5%   3,066.43
2028 4.0%   3,189.09

And that is without any knowledge of future inflation, which would presumably add to the increases.

The council had come out of a period of austerity, during which rates increases were limited to 3% and spending was cut, as the focus shifted to driving core council debt down below $230 million.

Rates had still risen faster than inflation over the last ten years.

At the same time, core council debt – excluding companies – was forecast to climb from just over $200 million now to $285 million by 2028.

So debt is forecast to rise despite the large rates rises.

Not helping, from ODT at the same time: Tender troubles mean more delays for cycleway

Dunedin City Council staff have voiced frustration after a call for tenders to complete an Otago Peninsula safety improvement and shared pathway project came in $20 million over an already-inflated budget.

The council last year announced a revised budget to complete the project alongside Portobello Rd and Harington Point Rd, which rose from an estimated $20 million to $49 million.

This is not the first ‘shared pathway project’ (cycleway) where the costs have blown out.

So even with large rates rises there must be little confidence that the ‘increased investment’ wouldn’t increase substantially more.

This was Mayor Cull’s pledge last election:

In the six years I have led our Dunedin City Council we have reduced rate increases.

That’s much like the Wellington example above – rates increases were ‘reduced’ to above inflation.

I wonder how what he will pledge if he stands again in next year’s local body election.

Leave a comment


  1. Trevors_elbow

     /  March 15, 2018

    Focus on core infrastructure not vanity projects like shared pathways.

    I suppose for the DCC allowing storm water infrastructure to be poorly maintain and expansion/modernisation to be postpone is an appropriate thing to do so cycleways can be build…… muppets. Green virtue signalling is more important than attending to basic council responsibilities….it would seem..

    • The council doesn’t do virtue signalling.

      A much-improved marketing plan for Dunedin still lacks ”brown faces”, a Dunedin city councillor says.

      The comment from Cr Aaron Hawkins came as councillors voted to endorse the Dunedin destination plan at this week’s economic development committee meeting.

      The vote came despite concerns expressed by Cr Hawkins, who said the document was a big improvement on earlier versions despite the ”deafening absence” of mana whenua within it.

      Cr Hawkins said mana whenua were overlooked even in the document’s pictures, which featured tourist attractions, a kayaker, cyclists, penguins and an albatross.

      He hoped the pictures could be changed to give mana whenua at least a ”nod”, but it remained ‘an extraordinary oversight for that to be absent to the degree that it is”.


  2. PartisanZ

     /  March 15, 2018

    FNDC now engages in a thing they call “placemaking” which, bizarrely, is currently focused entirely on the sweet little retirement village of Kerikeri … the one place that arguably doesn’t need extra Council money spent on it … and where previous attempts by Council to “make a place” have failed rather dismally – like the disastrous one-lane road system in the CBD.

    I love the “rate rise” spin though … It’s just like house prices … They never really fall but all doom-and-gloom is proclaimed when the rate of price increase reduces …

    It does, after all, affect the very foundation of the New Zeal Land economy – the speculative dollar!

  3. Blazer

     /  March 15, 2018

    Councils need to trim the pay packets of their own officers….opportunity for huge savings.Super City the biggest gravy train…ever concieved.

    • PDB

       /  March 15, 2018

      Goff has been a huge disappointment.

      • Blazer

         /  March 15, 2018

        at least the ratepayers fronted up over 200k for poor Steven Town ,for him to defend his defamation…case.National and ACT’s case for synergies and savings…proven to be…bull dust…as usual.

        • PDB

           /  March 15, 2018

          The Super City had no chance of being successful with liberals like Len and Phil running the show…

      • High Flying Duck

         /  March 15, 2018

        The SuperCity savings didn’t have a hope against the 2 tax and spend mayors we’ve had since it came into force – 3rd para is the important one…:

        “Goff, who as Opposition leader said the Super City would be less transparent, less accountable and branded the council-controlled organisations (CCOs) a “clique of cronies”, says nobody he talks to wants to turn back the clock.

        He believes the local boards are a strong, enduring part of the system, but acknowledges Aucklanders want to see more evidence that savings are being made.

        Those savings have amounted to $237m since amalgamation but got lost in big rates rises, increases in staff numbers and costs and the behaviour of CCOs – a term often referred to as a misnomer.

        “We are one city. It didn’t make sense to govern it as seven different cities … I would hate to be confronted with the challenges Auckland faces at the moment with huge growth and dealing with eight separate councils,” Goff says.

      • Richard

         /  March 15, 2018

        No, he had previous form!

        • Kitty Catkin

           /  March 15, 2018

          I believe that Rodney Hide was very disappointed at the way his really good idea was carried out in practice.

          • Kitty Catkin

             /  March 15, 2018

            Oh, for heaven’s sake, PDT, do you think that it’s been done well ?

  4. Callum

     /  March 15, 2018

    Those rates increases are inclusive of inflation. Only the first 3 years will be locked in though, after that they can be varied by the next LTP process (up or down, you’ll never see down though).

    • Kitty Catkin

       /  March 15, 2018

      Mine actually ARE down, as we now have user pays for water and rubbish.I no longer pay the same for water as people with three dunnies, swimming pools and lawn sprinklers.

      I recycle everything that I can and donate what I can (the local opshop sells garage rags, so old t-shirts and such things can go for those, and the vets like old towels for the animals to lie on and under) and put out my first rubbish bag of the year on Tuesday.

      We once had a newsletter that had a list of things like extra bus stops that would only add 1% to the rates – each. One didn’t have to be a mathematician to work out that agreeing to all 10 or whatever it was would add 10% to the rates. None of them were necessary things, even if extra bus stops would be nice to have. I bet that nearly everyone ticked no to all of them.

      • Kitty Catkin

         /  March 15, 2018

        I put very little rubbish out and could only put less out by cheating. I bet that the zero waste people who say that they don’t put any at all out do. What do they do with dead appliances, dead lighbulbs and old toothbrushes ? Or broken glass and worn-out shoes, clothes and tyres ? Toothpaste tubes ? Polystyrene from appliances ? I don’t consider it cheating that I used the polystyrene from a new microwave to pack the other one so that it can travel safely to the opshop in the opshop van,


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