Waipa District Council has recently confirmed that this year’s rate increase will be a staggering 15.5 per cent.
Peter Nicholl
Their 10-year plan also projects the rate increases for the next two years will be 10.7 per cent and 6.9 per cent and there was a rise of 14.8 per cent last year. Over this four-year period, Waipā’s rates will therefore increase by a massive 56.9 per cent.
This year’s rise of 15.5 per cent is one of the highest in the country. Hamilton City will also have a 15.5 per cent increase. Tauranga City, which has had a lot of problems in recent years, will have a 9.9 per cent increase and Auckland City a relatively modest rise of 5.8 per cent.
Waitomo District Council, will have an increase of only 2.9 per cent. This seems to contradict the mantra that big is always more efficient than small.
Waipa has said one of the reasons for the high rate increases is unusually high inflation. But New Zealand’s inflation over the period 2024 to 2027 is likely to be around 13-14 per cent. This is a far cry from WDC’s rate increases of 56.9 per cent over that period. Another explanation offered is that Waipa is a fast-growth area and there is a lag between the costs of development that fall on the council, which come early in the development process, and the fees the Council receives from developers, which come later. This explanation is correct.
The C3 growth cell covers land between Cambridge Road and the Waikato River, behind Te Awa Lifecare, the Velodrome and St Peter’s School.
What I don’t understand is that Cambridge has been in a strong growth cycle for some years already. Waipa should now be receiving fee income from the projects that were started three or four years ago.
WDC also said they had undergone an intensive cost cutting exercise in order to keep the size of the rate increase down. Tauranga Council cut their rate rise this year from 12 per cent to 9.9 per cent by reducing staff numbers. I don’t know if their intensive cost-cutting exercise also included looking closely at Waipā staff numbers. I hope it did. What I do know is that they have risen from 189 in 2015 to 295 today.
That is an increase of 56 per cent. It’s a coincidence that this rise happens to be exactly the same as the rise in Waipā rates from 2024 to 2027.
One thing that will be concerning the Reserve Bank when they come to take their next decision on the Official Cash Rate on July 9 is that most recent surveys of inflation expectations in New Zealand have been rising, and some show the CPI reaching five per cent in the next two years, well above the target range of 2-3 per cent.
When ratepayers in places like Waipā and Hamilton are facing rate increases of 15.5 per cent it is not surprising that their inflation expectations are rising – and that means it is very unlikely that the Reserve Bank will lower their official interest rate any further next week.
Waipa District Growth Cells
