Fair and Affordable Rates
AUTHOR Better! Whangarei DATE 18 Sep 2019
Are you aware that in the last five years residential rates paid on a typical house in Whangarei have increased by almost $500 from $1,800 to just under $2,300? That's an increase of 5 percent a year, at a time when the inflation rate averaged just 1.1 percent.
The Mayor and a majority of councillors have voted for rates to keep increasing by 4.7 percent a year. That means in ten years time the owner of an average home in Whangarei will be paying around $3,700 in rates a year, or $70 a week. Increases of this magnitude hurt families on low or fixed incomes the most.
Rural property used to be charged less than the residential rate because owners receive fewer services, but now they pay 1.3 times more than the residential rate. Many farmers are asking why their share of the rates burden has increased when less of the rating dollar is being spent on rural roads and they still do not receive the services provided to urban communities.
Small businesses leasing commercial property pay 6.5 times the residential rate. They too are asking why this is so high. Many are struggling to pay the rates and commercial real estate agent Peter Peeters says high rates are one of the main reasons there are so many empty shops in the city centre.
But it's not just rates that the Council has voted to increase. According to Council's Long-Term Plan, fees and charges will increase by 4.5 percent a year and sewerage fees will increase by 5.2 percent each year.
Ratepayers are being forced to pay more because the Council is living beyond its means.
But it's not only rates and charges that are rising. Between 2013 and 2018 total Council debt increased 24 percent from $180 million to $224 million. $30 million worth of investment property was sold to fund Council spending and now they are planning to increase debt even more to pay for a new $37.9 million Council office building.
These figures can be found in Council's Annual Reports and Long-term Plan 2018-28.
A council's credit rating measures the risk of defaulting on its bank loans. Our Council's AA rating is not because they are prudent financial managers, but because they have captive ratepayers to tap for more rates if it gets into financial difficulties.
Rates and charges should be fair and affordable. That's why we are calling on all candidates to support a comprehensive and fully transparent independent review.
It's easy to think voting is local body elections is not important. But this is not the case. You can help make a real difference if you vote for a candidate committed to fair and affordable rates.
DATE: 19 Sep 2019 - 11:03 AM
Hi Barry Thank you for your comment. The suggestion that there have been no rates increase for the 15 years prior to Mayor Mai being elected is pure fantasy. The rates data is published. I have tracked the Council's financial data since 1998. In the three years to 2001 the average rate increase was 2.1%. In the three years to 2004 it averaged 5.1%. During the three years of the Peters mayoralty the increase was 8.8%. In the next three years under Stan Semenoff the increase averaged 7.8%. Under Cutforth it was 6.3%. Under the Mai council rates have increased at about 3x the rate of inflation. The massive "catch-up" years of spending were during the second term of the Brown Council, and the Peter's and Cutforth councils.
DATE: 19 Sep 2019 - 10:31 AM
You've highlighted the increase in rates over the past five years. At a recent meeting for the Denby Ward, at the Kamo bowling club, one of the attendees stated that prior to five years ago there had been no rate rises for the previous 15 years. If true then is it not just a question of playing catch up. If people want all the services they expect then someone has to pay! In regard to the debt you state a figure of $224m as at 2018. In the audited (by Audit NZ) pre-election report the figure, as at 1st July 2018 was $124.6m and at the end of April 2019 $106.1m with a targeted increase over 8 years to $237.6m. Please advise why the difference and who audited your figures. Please do not include any advances made from the Reserve Fund as that is what reserve funds are for. Please only include external debt!