PHOTO: Wellington, New Zealand. STUFF
Wellington households, already facing a 21% increase in total rates for 2024/25, are now confronting further uncertainty about future rate hikes.
The Wellington City Council (WCC) is re-evaluating its water infrastructure spending and the potential sale of its 34% stake in Wellington Airport, both of which are significant components of the council’s long-term 2024-34 plan, which outlines projected rate increases for the next decade.
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What do Wellington residents currently know about their rates?
WCC’s long-term plan had initially forecast an 18.5% rate increase for 2024/25, following a 13% rise the previous year. Depending on the suburb, median rates in Wellington vary between $3,276 and $8,000. For example, a household that paid $4,000 in rates in 2023/24 will see an increase of over $700.
In addition, Greater Wellington Regional Council has hiked its rates in the city by 25%, estimating that the average residential property in Wellington will pay $1,178 in 2024/25, a rise of $212.
Overall, Wellington households will pay about 21% more in rates this year, with many facing increases of over $1,000.
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What’s the outlook for future rate increases?
WCC’s long-term plan shows projected rate increases of 12.8% in 2025/26, 11.4% in 2026/27, and 9.9% in 2027/28. A household that paid $4,000 in 2023/24 would be paying approximately $2,500 more by 2027/28.
Greater Wellington also predicts rate increases across its entire region, with hikes of 20.5% in 2025/26, followed by 14.5%, 13.3%, and 7.1% in subsequent years. For properties at average capital value, this equates to nearly $200 in 2025/26 and slightly more than $150 in the following two years.
As a result, many Wellington households could see total rate increases of $3,000 or more over the next four years.
What’s contributing to the uncertainty?
Two main factors are adding to the uncertainty around future WCC rate hikes:
- Government water reforms: Mayor Tory Whanau has indicated the council needs time to assess the impact of the Government’s water policy on its plans.
- The proposed sale of WCC’s stake in Wellington Airport: Proceeds from the sale were intended to create a disaster recovery fund. However, nine out of 16 councillors have signed a motion to cancel the sale. If the sale doesn’t proceed, WCC may need to reconsider its entire budget, potentially cutting $400 million from its broader program.
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Why are these issues so critical?
Councillor Diane Calvert pointed out that both the water reform and the airport share sale are central to WCC’s long-term financial strategy. If either issue changes, the council might need to reconsider its entire spending, borrowing, and rate-setting strategy, potentially triggering further public consultation.
Mayor Whanau emphasized that without selling the airport shares, the council would lose its form of self-insurance, requiring alternative ways to cover the $400 million shortfall in its budget. If the sale is blocked, the council would have to go back to consultation, a process that could take a year.
How is the mayor responding to the rate hikes?
Mayor Whanau has acknowledged the financial pressure, sharing that she sold her car to manage her bills and is walking to work again. She also noted that her mortgage rates had doubled in recent years. Although she’s not “proud” of the size of the rate increase, she emphasized that it’s a nationwide issue affecting local councils.
SOURCE: STUFF