Wellington Scoop
Network

Going up, again and again

by Lindsay Shelton
For everyone who’s having to pay next month’s 5 per cent rates increase to the Wellington City Council, a reminder that last year Andy Foster forecast an increase of 48 per cent over the next ten years.

Here’s what Andy wrote a year ago:

The bad news is that there is a lot more proposed. The Wellington City Council Chief Executive’s Pre-election Report shows that over the 10 years of our Long Term Plan (LTP) rates are expected to rise by 48.2%. If you add a targeted tourism rate (targeted to relevant businesses) planned for next year, the rise is 52.2%. That is after accounting for a growing ratepayer base – a perfectly reasonable deduction because rates are then spread across more ratepayers. Add that back in and the raw number is 66.0%.

And more from Andy:

It gets worse. That does not include remotely enough money for Let’s Get Wellington Moving or for Civic Square.

(He also said: “I just do not think that such a rates trajectory is remotely affordable,” but councillors didn’t want to consider this.)

Are ratepayers on fixed incomes all relaxed about the rates increases predicted for the next decade? If the rates don’t go up, how will Wellington pay for the major projects which need to be carried out? We have to ignore the major projects that no one (except the council) wants – yes, I’m looking at the unpopular convention centre – but we can’t ignore the need to strengthen and reopen the Central Library, and to fix the city’s two closed buildings on Civic Square, and to get serious about replacing the old sewage pipes and water mains that keep bursting.

Next month I’ll be paying $1329 as the first quarterly instalment of my newly increased rates bill. (With a ten per cent penalty if I fail to pay on time.) In September five years ago my quarterly bill was $1172. In September ten years ago – $872. I’ve come across home owners who are still paying rates at the level of ten years ago – they should start making savings for the inevitable increases that Andy has warned us about.

When the rates increase of 5.1 per cent was set last month, the mayor said the council didn’t want to put an “unbearable burden” on ratepayers. He said the average annual increase would be around $150, providing that the rateable value hadn’t changed.

The rates increase for my Brooklyn house is above that average. My rates are now $4426 – a year ago they were $4175. My income hasn’t increased in recent years, so to pay the council I’ll have to find the extra $250 by cutting spending elsewhere – the local hospitality sector will be the loser. Five years ago my bill was only $3728. And ten years ago: $3011. That’s close to a 50 per cent increase in ten years, which is what Andy is telling us will be the increase for the next ten years as well.

And next year? There are reports that the city council is looking at a 15 per cent increase. How would that be received by ratepayers on fixed – or declining – incomes.

Last year John Milford of the Chamber of Commerce said: “We can’t keep increasing rates forever.” Even for those who don’t usually agree with John Milford, in this case his opinion will be shared by most of us who are expected to pay the rates increases this year, next year, and for every year into the future.

13 comments:

  1. Northland, 17. August 2020, 18:48

    The exponential growth delivered by even a 5% rates rise year on year is simply not sustainable. It’s a doubling every 14 or so years. Over a working lifetime, that represents almost an 8 fold increase. And if the WCC decided they needed an 8% year on year rates hike, then ratepayers will be experiencing an eye-watering 25 fold increase over their working lives. The plain truth is that the WCC need to start finding ways they can save serious amounts of money and then stick to cost of living increases only.

     
  2. Concerned Wellingtonian, 17. August 2020, 18:53

    My WCC rates have increased by over 6%. What is this 5.1% promise? (You have to separate WCC’s rates from Greater Wellington’s rates in order to calculate the increases.)

     
  3. Concerned Wellingtonian, 18. August 2020, 6:34

    Northland, part of the problem is the number of young councillors who have never had to pay rates and do not know what it’s like. Another problem is the enormous pay which they receive. This insulates them from the realities which face the rest of us.

     
  4. Ian Apperley, 18. August 2020, 16:10

    First quarter rates bill in Carterton? About $500

     
  5. Conor, 18. August 2020, 17:22

    Population growth in existing residential areas is the easy solution. Also charging for “free” council services – particularly on street parking, roads, etc.

     
  6. Matt, 18. August 2020, 22:54

    If you’re paying rates then count yourself lucky! It means that you own property in Wellington! Look how much that has gone up in value. You have so many more options than young Wellingtonians who desperately want to put down roots here. The city is falling apart from years of underinvestment in infrastructure due to the ‘keep rates low’ crowd. Get real! This is the price of living in a competitive, desirable city!

     
  7. BT, 19. August 2020, 18:13

    I have a mortgage on a modest house and its value increased by about 40k in the last 12 months doing absolutely nothing. How any owner can possibly complain about an extra $500 a year is beyond me. If you earn $35k a year doing nothing on your assets and have a cash flow problem paying $500 a year then you need to get an accountant to help you turn your investment into cash.

     
  8. Northland, 19. August 2020, 21:53

    BT, the prices of houses can rise and fall on the whim of the market or due to events such as Covid or earthquakes. Sure you might make 40k last year and it makes you feel like the rates rise is a non-issue, but are you expecting the WCC to cut the rates if your house price falls the next year?

    Matt, the fact that the city is falling down due to years of under investment is nothing to do with the ratepayers and everything to do with the WCC. Rates have risen handsomely for the Council and they should have been doing better with the money that has been coming in.

     
  9. Concerned resident, 19. August 2020, 22:57

    BT : If you sell your house what then?? Rates are like paying rent in many cases and it would seem the money is spent on various nice to have things, like rainbow crossings, conference centres, cycleways ,’art works’ etc. Property purchase is based on income, should the property increase in value most people are not in a position to trade in their house and buy another one. Buying a second home is in many cases more difficult than purchasing the first one. Rates are not affordable even for apartment dwellers in high rise buildings.

     
  10. Ian Apperley, 20. August 2020, 10:18

    Here is everyone arguing privilege and property investment and no one is asking “are rates value for money?” Pro-tip: not by a long shot. Dozens of vanity projects in the hundreds of millions and no focus on priorities all ‘managed’ by a massive Council in terms of FTE given they have pretty.much outsourced everything.

    We don’t need rate rises, we don’t really need the WCC at all…

     
  11. Toni, 20. August 2020, 11:25

    Absolutely agree Ian. All these vanity projects are to keep them employed as they have abdicated responsiblity for their core business. Perhaps it is time rates were split between the companies actually doing the job?

     
  12. michael, 20. August 2020, 11:29

    Andy Foster forecast a rates increase of 48 per cent over the next ten years so why hasn’t anyone challenged him about this?

     
  13. TrevorH, 20. August 2020, 12:04

    @ Ian Apperley: I agree. Councils including the WCC were set up to provide services essential for towns and cities to function, not as some kind of “wealth” redistribution agency. In any case so much of the wealth that they do redistribute ends up in the fat paypackets of assorted jobsworths these days.