Kerre Woodham: What can we do about rate rises?

Commentators are telling us that the tide is turning, that we've reached the bottom of the cycle. ANZ has lowered its mortgage interest rates, so other banks will surely follow suit, bringing relief to many households. Spring is almost here. And then the rates bill arrives in the mail. Any financial gains are immediately lost, any lift of the spirits plummets.  

The Government is well aware that rising rates are adding to the economic doom and gloom. They put councils on notice last year to deliver value for money and promised to name and shame councils who were profligate spenders. They called it a table of spending, we call it naming and shaming. The report is designed to hold councils accountable on six metrics:  

• Rates – the change in rates since the previous year and the forecast change in rates over the next 10 years. 
• Council debt  
• Capital expenditure, including a breakdown by activity class such as roading and water services.   
• Balanced budget – to show whether the Council is actually coping with the rates that come in with the money it has or having to borrow to sustain itself.   
• Road conditions – so ratepayers can compare the state of their local roads with councils across the country.

Local Government Minister Simon Watts says communities can now compare how much their council spends on core essentials like infrastructure and see whether their rates are going up more than average. We have been clear, says Simon Watts, that we want to see councils get back to basics, focusing on delivering essential services and infrastructure, improving local decision making, and supporting their communities through the cost of living, not adding to it.  

He's also introducing a bill to remove four well-being provisions: social, economic, environmental, and cultural. They were reintroduced by Labour in 2019 after being removed by the previous National government in 2012, who removed them after Labour introduced them in 2002. So there's been a bit of political ping pong going on there. It will also impose a requirement on councils to prioritise core services when managing finances and setting rates. The threat of a rates cap too is ever present. If you don't stop increasing rates, then we will put a cap on you, the central government has said to local, so that you can't just hoick up the rates to pay your bills. Simon Watts points to rates caps in NSW and Victoria and says the same could happen here. I’m not sure that is the answer, not without accepting a massive loss in services, but how on Earth do you manage to budget when your rates rise well beyond inflation? What options do you have?  

There's a story in today's New Zealand Herald of a rates rise of 72% for one family in Orewa. That's because they're living on land that's ripe for development, except, of course it's not, because WaterCare is not issuing any resource consents, because there simply isn't the infrastructure to sustain any more development. So they're facing a huge hike in their rates because of the value of the land, but the value of the land can't be realised. So how on Earth do you cope with the 72% rise in rates? How do you manage? Do you sell the property because you simply can't afford the rates? Do you apply for rates relief? Do you just not pay it?  

For a long time, those who have bothered to vote in local body elections have voted for councillors who promise there'll be no rates rises, which means that a lot of the work that councils are doing has been delayed. They haven't had the money because homeowners, ratepayers, have elected councillors that have promised there will be no rates rises. But all that's doing is delaying the inevitable. In part, we have brought this on ourselves. You vote for people who aren't going to increase rates, you don't bother to vote. You don't bother to stand for council. When I say you, I mean we. So in part, we've brought this on ourselves. And because there haven't been the cheques and balances to monitor the spending, irresponsible councils have been able to do exactly as they wish - vanity projects wasteful spending. And those within the infrastructure of Council too have spent like drunken sailors. I would very much like to hear from those of you who have received your rates bill. Around the country, we've seen massive increases. Are you getting value for money from your Council? And what on Earth can you do about it? 

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Carrywood and Morning's podcast from news Talks.

Speaker 2 (00:10):
Hed B commentators are telling us that the tide is turning,
that we've reached the bottom of the cycle. An Zet
has lowered its mortgage ines restrait, so other banks will
surely follow suit, bringing relief to many households. Spring is
almost here, and then the rates bell arrives in the

(00:32):
mail or via email, depending on your delivery source. Any
financial gains are immediately lost. Any lift of the spirit's plummets.
The government is well aware that rising rates are adding
to the economic doom and gloom. They put counsels on
notice last year to deliver value for money and promise

(00:55):
to name and shame counsels who were profligate spenders. Or
they called it a table of spending. We call it
naming and shaming. The report is designed to hold councils
accountable on six metrics rates obviously the change in rates
since the previous year. In the fourcast change in rates

(01:16):
over the next ten years, council debt, capital expenditure, including
a breakdown by activity class such as roading and water services,
balanced budget to show whether the council is actually coping
with the rates that come in with the money it
has or having to borrow to sustain itself, and road conditions,

(01:38):
so rape as can compare the state of their local
roads with councils across the country. Local Government Minister Simon
Watts says communities can now compare how much their council
spends on core essentials like infrastructure and see whether their
rates are going up more than average. We have been clear,

(01:59):
says Simon, wants that we want to see councils get
back to basics, focusing on delivering essential services and infrastructure,
improving local decision making and supporting their communities through the
cost of living, not adding to it. He's also introducing
a bill to remove four well being provisions Social, Economic,

(02:20):
Environmental and Cultural. They were reintroduced by Labour in twenty
nineteen after being removed by the previous National government in
twenty twelve, who removed them after Labor introduced them in
two thousand and two, so there's been a bit of
political ping pong going on there. It will also impose

(02:41):
a requirement on councils to prioritize core services when managing
finances and setting rates. The threat of a rates cap too,
is ever present. If you don't stop increasing rates, then
we will put a cap on you. The central government
is set to local so that you can't just hyke

(03:03):
up the rates to pay your bills. Simon Watts points
to rates caps in New South Wales and Victoria and
says the same could happen here. I'm not sure that
is the answer, not without accepting a massive loss in services.
But how on earth do you manage to budget when

(03:24):
your rates rise well beyond inflation? What options do you have?
There's a story in today's New Zealand Herald of a
rates rise seventy two percent for one family in ALLWA.
That's because they're living on land that's ripe for development, except,

(03:47):
of course it's not because water Care is not issuing
any resource consents, because there simply isn't the infrastructure to
sustain any more development. So they're facing a huge ok
in their raids because of the value of the land.
But the value of the land can't be realized. So
how on earth do with the seventy two percent rise

(04:07):
in rates? How do you manage? Do you sell the
property because you simply can't afford the rates? Do you
apply for rates relief, do you just not pay it
for a long time. Those who have bothered to vote

(04:30):
in local body elections have voted for counselors who say,
we promise there'll be no rates rises, which means that
a lot of the work that councils are doing has
been delayed because they haven't had the money. Because homeowners
rate payers have elected counselors that have promised there will

(04:51):
be no rates rises, but all that's doing is delaying
the inevitable. In part, we have brought this on ourselves.
You vote for people who aren't going to increase rates.
You don't bother to vote, You don't bother to stand
for counsel And when I say you, I mean we.

(05:11):
So in part we've brought this on ourselves. And because
there haven't been the checks and balances to monitor the spending,
irresponsible councils have been able to do exactly as they wish,
vanity projects, wasteful spending, and those within the infrastructure of

(05:32):
council too have spent like drunken sailors. So I would
very much like to hear from those of you who
have received your rates bill. Around the country, we've seen
massive The table shows the published table that came out
a week or so ago shows which councils have had
the highest increases. Are you getting value for money from

(05:54):
your counsel, and what on earth can you do about it.

Speaker 1 (05:57):
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