Wellington residents torn over proposed 17 percent rates hike

Harry Lock for RNZ

Wellington residents are expecting to feel a pinch in their pockets, after it was revealed the council is looking at introducing a rates rise of up to 17 percent.

It comes as the city faces a trifecta of issues: earthquake prone buildings, failing water pipes, and an outdated transport system.

There will be $2.7 billion over ten years going into upgrading and improving the city's constantly bursting and failing water pipes.

Wellington resident Luke said he is torn about now having to countenance a rates increase somewhere between 14 and 17 percent.

"That stuff needs to be done at some point.

"But when you think about these things, a lot of people are thinking like, well I'm a renter, we're trying to save, we've got a couple of young kids, we're trying to get ahead.

"It's hard to see how those things affect me directly, but I definitely feel the affect on - that's more money going out of my pocket, and makes it harder for me to achieve our goals as a family."

So why are rates going up so highly?

It is not just the city's water woes - Mayor Foster, speaking to Morning Report, also put some of it down to the financial impact the pandemic has had on council finances, as well and the loss of income through services fees and dividends.

But that doesn't even consider the huge amount of money going into strengthening some of the city's most beloved buildings. Take the Central Library for example, which is going to cost $180 million.

The Town Hall just opposite, is going to cost over $110 million. And strengthening St James Theatre still doesn't come cheap - weighing in at around $25 million.

Chloe, who has only lived in Wellington since August, is empathetic to what the council is having to deal with.

But she would rather the money did not come from ratepayers.

"Definitely from a personal perspective," she said. "But equally - I mean I hope they've explored all avenues, and not just thought immediately of ratepayers.

"But if that's the only option, I guess that's what they've got to do."

The mayor has suggested increasing the council's borrowing limit.

Meanwhile, Walter - a Wellington homeowner - is frustrated the council has in the past spent money on nice-to-haves, rather than need-to-haves.

"I mean now they have the problem with all the pipes undergound and that should have been fixed years ago.

"Now they're putting up new buildings - for certain things which are not really that necessary."

But pipes and buildings is not all the council is contending with.

The other big money spender is transport - the council is co-funding the $6 billion Let's Get Wellington Moving programme.

A highly critical review of that programme, undertaken last year and published today, has found it is at risk of failure, has a detrimental culture, and has been consistently under-resourced.

Mahi Tangaere - a board member of the city's Chamber of Commerce - said they will be looking intently into exactly where the money is going.

"I don't think you can live in this city, and not appreciate what it needs," she said.

"We are all desperate to have things better. We just want to make sure the money they're going to get is actually going to get targetted at the areas we really need it. "

But she's worried what a big rates rise could do for some of the city's businesses.

"I don't think that any rates increase comes easily, and building owners bear a lot of the brunt, and they will have to pass it on to their tenants.

"But retail is struggling. Some businesses will not survive, I believe, in the next six to 12 months."

So with Wellington now looking at an increase somewhere between 14 and 17 percent, what does that mean for other councils? And will residents of other cities and towns be fearing a similar increase in rates?

Local Government New Zealand president Stuart Crosby doesn't think so.

"Not in the high teens, I think the majority of them will be a little bit above what they anticipated in their longer term planning."

He said the extent of rates increases will be variable, dependent on each council's state of infrastructure, and their reliance on international tourism.

Consultation on Wellington's own rates increase is expected to begin sometime in April.