Wellington Scoop

Regional Council “confines” its average rates increase to 5.9% (down from 6.5%)

News from Greater Wellington Regional Council
The Regional Council today voted to confine its increase to 2019/20 regional rates to an average of 5.9%, the amount forecast in its Long Term Plan 2018-28.

The decision was made after careful consideration of the impact of unprecedented increases in residential property valuations in some parts of the region last year.

Property values rose faster in some parts of the region than others, and these spikes mean that those districts will have a greater regional rate increase compared with other districts. For Wellington City, this was exacerbated by the impact of the Kaikōura earthquake, which has reduced the overall value of commercial property in the CBD.

“It is clear that the difference across the region in rising house prices and the reduction in commercial valuations has had a big impact on our rating systems and we needed to take this into consideration when setting rates for the next financial year,” says Greater Wellington Chair Chris Laidlaw.

“Council had originally considered a 6.5% average rates rise for our 2019/20 Annual Plan, but we were all concerned about the impact on particular areas and property types and we have taken the time to reconsider this to reduce the impact on communities.

“This is a problem that our territorial authorities are also facing, with Wellington City Council recently announcing a plan to change their differential allocations between residents and businesses to reduce pressure on rate payers.

“We don’t have the option of increasing user charges apart from Public Transport fares and this year we have resolved to freeze bus and train fares.”

To keep the rates rise at 5.9%, the Regional Council will make up to $800,000 of reductions in the overall budget, including reducing the contingency held for legal processes as part of the Natural Resources Plan and using additional amounts from reserves.

“We have had a good look at our organisation and while the reduction in funding isn’t ideal, we are confident we can continue with our key work programmes as set out in the Long Term Plan and build better infrastructure and ensure greater resilience and wellbeing for the Greater Wellington region,” says Cr Laidlaw.

The Council also decided to apply a business differential to the Wellington City general rate to provide a fair and equitable balance between residential and business rates. This will require a specific amendment to the Revenue and Financing Policy and Annual Plan 2019/20, both of which will be formally consulted upon during April and May this year.

Councillors will be getting out into the community and meeting a wide range of stakeholder groups during the formal consultation period from 24 April to 24 May.

Council would be looking at long term options to address the issue of uneven rises in property values and the impact they had on regional rates, including how to ensure rates are allocated equitably across the region. It expected that this would form a change to the Revenue and Financing Policy in 2020/21.

“This issue is affecting councils throughout the country. We really need to have a good look and understand the implications swiftly changing property values can have on the rating system and structure.”

To receive an email when the feedback/formal consultation period opens, register on Have Your Say https://haveyoursay.gw.govt.nz/register

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  1. Manny, 2. April 2019, 15:30

    Considering all the problems and mismanagement, the increase is unacceptable.

  2. Alan, 2. April 2019, 16:32

    Another example of not being able to live within its means.
    Wish I had a 5.9% increase in wages. I’d even take a cut from 6.5%.
    Thanks for nothing GWRC.

  3. greenwelly, 2. April 2019, 16:39

    And when you dig further it looks like they are going to slug CBD apartment dwellers even more. This is bizarre, they claim one of the reasons for the increase in rates is partially because of changes to the bus network “in response to community feedback.” i.e it’s our fault for asking for a bus service that actually works. But they then introduce a residential CBD differential so CBD residents ( who likely walk to work) will pay more (on a $ for $) than those in the suburbs…This is totally through the looking glass

  4. Michael Gibson, 2. April 2019, 17:22

    Why no news about the % rise in Wellington City’s residential rates compared to its business rates? These would have been very simple figures to give us – what is being hidden?

  5. Casey, 2. April 2019, 18:45

    5.9% average across the region, but what does this translate to for Wellington City ratepayers? Pensions went up 2.75% yesterday, and many reliant on that source of income will be further impacted, as they will be by the WCC rates hike of 3.9%, or whatever the WCC decide.

    Wellington City has ended up with a substantially old diesel bus fleet, part of the fleet that runs to a haphazard timetable if at all. Ratepayers are being punished for electing an inept set of councillors. Time for all GWRC councillors to repay their salaries of the past 2.5 years and resign.

  6. Roger Blakeley, 2. April 2019, 19:11

    This year the issue was that average Wgtn residential property values increased by 44% in the valuation of Sept 2018. These properties attracted an unfair share of regional rates. The decision today reduced the Wellington residential rates increase to 8.9% from 15.2%. [via twitter]

  7. greenwelly, 2. April 2019, 19:30

    @Roger Blakeley. But it’s not the movement that is the problem, it’s that the other cities in the region don’t have their three-yearly revaluations until this year(2019). So you will suffer the same problem next year (on a lesser extent, as Wgtn makes up the bulk of the residential value in the region).. as the other cities will show the huge jump in values that Wellington City did this year.
    You can tinker with differentials to helps smooth things each year, but in the long term the best solution is to have all the revaluations happen in the same year.

  8. Lindsay Shelton, 2. April 2019, 19:49

    Thanks to Roger Blakeley for revealing that the rates increase for Wellington city home owners will be 8.9 per cent. No thanks to the Regional Council for choosing not to announce this increase (and the increases for other cities) in its press release.

  9. TrevorH, 3. April 2019, 6:37

    I don’t see why anyone should have to pay a cent more for the appalling standard of service dished up by the Regional Council. Abolition is the only sensible way forward.

  10. Michael Gibson, 3. April 2019, 7:13

    Why isn’t Councillor Blakeley also mentioning the percentage increase in commercial rates?

  11. Tony Jansen, 3. April 2019, 10:58

    How can GWRC advocate tax/rate payers coughing up $1.8million to partially cover increased costs for extra bus services when the new system does not come close to performing to the standards of the previous point to point system?
    I would urge all rate/tax payers to deduct this pro rata amount from their GWRC bills. I also urge GWRC to dismiss their CEO and to urge Councillors Laidlaw and Donaldson to not stand again for re-election.

  12. James S, 3. April 2019, 12:17

    The Regional Council plans to meet the previously planned budget by “reducing the contingency held for legal processes as part of the Natural Resources Plan and using additional amounts from reserves.” Translated = ducking the issue.
    Why doesn’t the Regional Council actually make some tough decisions about what it was planning to do in the coming year and consult on that?

  13. Roger Blakeley, 3. April 2019, 17:02

    In response to the questions above:

    Lindsay Shelton: The residential property rate increases for all cities and districts in the region are : Wellington City 8.9%, Hutt City 3.7%, Upper Hutt City, 6.5%, Porirua City 2.3%, Kapiti Coast District 9.0%, Otaki rating area 4.7%, Masterton District 9.3%, Carterton District 7.5%, South Wairarapa District 5.7%

    Michael Gibson: The business rates increases in Wellington City are : Wellington CBD 3.8%, Wellington city business properties outside of CBD 4.3%.

    Greenwelly: One of the decisions GWRC made yesterday was to undertake a more comprehensive review of the Revenue and Financing Policy before the 2020/2021 Annual Plan, to avoid the sort of distortionary effects created this year by the revaluation of Wellington City properties in Sept 2018.

  14. Roger Blakeley, 3. April 2019, 21:39

    @greenwelly The re-valuations are on a rolling 3 year programme. Most are undertaken by Quotable Value ( QV). There would be practical difficulties in doing them all in one year. The re-valuations are done by the 8 TAs rather than GW. The different dates are only an issue for the regional council. We have the Equalised Capital Value model maintained by QV to try and manage this issue.

    GWRCouncil has agreed to review the Revenue and Financing Policy next year to see if we can introduce a capping mechanism to avoid any future/extreme peaks/swings. The issue this year was a unique combination of 44% increased residential values in WCC area coupled with an overall value decrease for the CBD business sector due to the earthquake. This combination of factors in unlikely to occur frequently!

  15. Harry M, 4. April 2019, 7:55

    It’s the govt (QV) deciding that the property tax you pay should be based on sales price median .
    And that govt market price valuation does not reflect your land use or any services that the rates go to.
    Quotable Value Limited is a state-owned enterprise; their purpose is said to be “to help New Zealanders make better decisions about property” not to get revenue.

  16. glenn, 5. April 2019, 9:49

    Come this next election, I’m making sure that I know all the councillors currently on the Regional Council (not overly hard, as most are washed up politicians, feeding on the gravy train), so I can categorically vote for some fresh faces, to try and deal with the current disasters this lot have given rise to.

  17. Marion Leader, 5. April 2019, 10:58

    Glenn, “Kick ’em Out”: the ideal name for a ticket.