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Monday, April 15, 2024
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A time of year that doesn’t rate so highly

It’s April. That time of year when every councillor and mayor in every local authority across New Zealand sighs and grits their teeth, and every ratepayer flinches thinking about next year’s [inevitably higher] rates bill.

Let’s spare a thought for the decision-makers here because they are probably local ratepayers as well. Meaning the unpleasant task of setting next year’s tab will also hit them in the pocket.

For the past few years, we have gotten used to skyrocketing rates bills. While South Wairarapa District Council’s whopping 30 per cent rise two years back was an outlier, year on year, across New Zealand, local rates have steadily crept skywards. Greater Wellington Regional Council [GWRC] recently announced an 18 per cent uplift for next year. This will be reflected in local bills, as the hike is passed on.

The question is, what will local authorities do? The Reserve Bank clearly signalled with ongoing interest rate hikes that it’s time for some belt-tightening. So will the councils rein in spending, so next year’s rises are more in line with the [almost historical] stated inflation target of about two per cent, or will they throw caution to the winds? Statistics New Zealand reported the consumer price index increased 7.2 per cent in the 12 months to December 2022. That increase followed another 7.2 per cent annual increase in September 2022 and 7.3 per cent in the June 2022 quarter.

The numbers remain stubbornly high – and look set to stay that way unless the brakes are put on spending. But whose spending? On one hand, all of us want lower rates, but on the other, we want decent services and good levels of local employment.

For councils to keep rates rises low or even better, non-existent [which is what we all want], they must provide the same [or better] services than last year [which is what we all want], but at the same cost to us – even though the cost to them has gone up. The council decision-makers, therefore, have a problem.

The big question is, where do councils make cuts or stop spending?

It can’t be the roads, which are already under pressure from increased weather events, heavy traffic, and ongoing maintenance requirements.

It can’t be rubbish collection and recycling because we need to manage our waste sustainably, and the trash has to be taken out.

It can’t be animal control, libraries, or swimming pools because the community needs and uses these things.

Inevitably these discussions then turn to staff and salaries, both in terms of numbers and dollars. Are the numbers of staff justified, people ask. Are the salaries too high? But at the same time, the community rightly expects things to be done in a timely way. If building and other consents are not processed, if emails remain unanswered, and if someone doesn’t answer the phone, then fingers are pointed. Local employers cite the proximity of Wellington, and higher salaries, as an ongoing difficulty.

With rates, as with other costs, we all agree someone has to call time on endless hefty uplifts. How to do this is an altogether more difficult issue to agree on.

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