Whakatāne District Council has today approved its draft Annual Plan budget for 2026/27, locking in confirmed cost savings and using them to reduce an on-going operating deficit. In addition, a portion is being set aside to allow for cost contingencies due to the current volatile economic environment.
The average rates increase for the 2026/2027 year was set in the previous long term plan in 2024 at 9.4%. In spite of escalating costs in the local government sector, including managing the workload arising from proposed government reforms, the Council has been working hard to identify a significant amount of operating savings. Councillors voted to apply these savings primarily to the operating deficit rather than reduce rates at the expense of increasing debt.
“Council has been facing an ongoing operating deficit, meaning we’ve been spending more than the revenue we bring in,” says Chief Financial Officer, Paul Davidson.
“To address this, our Mayor and Councillors asked staff to go back through the draft budget line by line to identify where savings could be made without cutting core services.”
“As a result of that work, staff identified around $1.35 million in savings. This included reviewing operating costs, adjusting fees and charges where appropriate, updating inflation assumptions based on the latest forecasts, and removing a number of previously planned or vacant roles that were no longer considered essential.”
Acknowledging that a 9.4% rate increase is much higher than desired, it is essential that Council stops borrowing for its operational expenditure to ensure that in the long run it can continue to deliver value for money services to the community.
The contingency that was also agreed acts as a buffer to help the Council deal with unexpected costs or higher than expected inflation during the year, rather than having to borrow more or make rushed cuts after rates have already been set.
If the contingency is not needed, those funds can instead be put toward further reducing Council’s operating deficit.
Mayor Nándor Tánczos thanked staff for the work that had gone into the Council paper.
“As a Council we are committed to prudent financial management. That means looking at how to cut costs to reduce the rates burden rather than simply borrowing money to pay for the shortfall, while recognising our statutory obligations and the needs of our communities.”
Mayor Tánczos used the predicted spike in oil prices resulting from war in the middle east as an example of why a contingency fund is a wise move.
The draft budget does not include significant changes to services or projects already planned for 2026/27. Some capital projects have been retimed to better match funding or delivery schedules, and overall spending has been tightened, but the Council’s key priorities remain the same.
“Because the draft Annual Plan does not significantly change the Long Term Plan, there seems little point in spending a lot of money to formally consult with the public again about the same things. Instead, we’ll run an information campaign to explain the draft budget, the decisions that have been made, and what they mean for rates and services,” says Mayor Tánczos.
The draft Annual Plan will continue to be refined over the coming months. The final Annual Plan for 2026/27 will be brought back to Council for formal adoption in June 2026, before rates are set for the new financial year.
More information will be made available through the Council’s information campaign and on the Whakatāne District Council website.
