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 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 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?

Kerre McIvor, is a journalist, radio presenter, author and columnist. Currently hosts the Kerre Woodham mornings show on Newstalk ZB - where this article was sourced.