Whakatāne District Mayor Nandor Tanczos says the Government’s announcement of a rates range, replacing the earlier proposal for a strict rates cap, is well intentioned but is likely to make things worse for ratepayers.
“We all want rates to go down, but what is being proposed is largely the same system that has failed across the Tasman, with pretty dire consequences for local communities in New South Wales and Victoria,” he says.
“It just leads to underinvestment in critical infrastructure, reduced public services, and then every few years a major correction that leads to a rates spike. All the evidence is that it does not work for communities and adds massive costs to councils.”
“It’s precisely this kind of underinvestment that has led us to the problem the country is in. It’s catch up time right now. Kicking the can further down the road will lead to an even harder adjustment when reality catches up with us.”
The Government has proposed a 2–4% annual rates target band, to be phased in between 2027 and 2029, with a new regulator overseeing compliance. Councils would be able to apply for variations in circumstances such as natural disasters.
“The regulator function being proposed to oversee the whole thing just adds another bureaucratic layer to what is already a heavily regulated area. This kind of increased compliance creates more churn on staff time, so what’s meant to be saving us dollars can end up costing us more.”
While supporting efforts to keep rates affordable, he says that accountability should be to the community that elects the councillors and mayor, not to a Minister in Wellington.
“Double-digit rates increases are unsustainable, that’s a given. Everyone wants lower rates rises, including all of our Councillors, but a centrally imposed limit restricts councils’ ability to respond to local needs. It takes away communities’ right to determine their own priorities.” “It’s likely to impact the infrastructure and services councils can afford to deliver and prevent communities deciding for themselves what services they want. I’ve said for many years that we need constitutional change to embed local decision-making over local matters. This is another example of why.”
Mayor Tanczos says the proposal is still very general with a lot of uncertainty. The Council will take time to analyse what the proposal means in detail for Whakatāne district residents.
“As with all government announcements, we need to understand the full implications for our residents, and that takes a bit of time. This is another reform announcement with a lot of uncertainty and short response timeframes.”
He notes that Local Government New Zealand (LGNZ) has been lobbying the Government on rates capping for many months and he shares several of the concerns LGNZ has expressed.
“The proposal now captures core infrastructure like roads, bridges and public transport, which the Government had previously indicated would be excluded,” Mayor Tanczos says.
“Local government needs a common-sense, fast-track process for exemptions - particularly for fast-growing areas or in response to natural disasters. That process must be flexible and fast-moving, not bogged down in bureaucracy.”
The Government is seeking feedback from councils by February.
“First, we need to see the full proposal. Then we’ll work quickly to understand what it means for Council and for our ratepayers. We owe it to our communities to fully understand the proposal and to influence this policy so it results in the best possible outcome for our residents.”