4.91 per cent rates hike 'outrageous'

Tuesday, 22 May 2018

Invercargill residents will be hit with a rates hike of nearly 5 per cent in the next year and not all are happy.

At an Invercargill City Council meeting on Tuesday, Mayor Tim Shadbolt and councillors voted for a 4.91 per cent rates increase in 2018-19.

The 4.91 per cent figure is the overall average rates increase and some properties will be higher and some will be lower. 

The figure was going to be about 1 per cent lower but council committed to some extra funding last week, including a one off grant to Stadium Southland of $300,000.

A person with a residential property valued at $215,000 this year but has a new valuation of $255,000 will face a rates rise of $105, up from $2188 to $2293.

Invercargill Ratepayers Advocacy Group spokesman Nobby Clark said a rates hike of nearly 5 per cent was 'outrageous', when considering the low inflation rate.

'Most ratepayers could understand it going up similar to inflation, but nearly 5 per cent?'

His rates would go up by about $100 for the year, which would not unduly affect him, but for others on benefits and low wages it would 'squeeze the margins again', he said.

The council got money from its rates and its trading companies and 'clearly not enough is coming from Holdco [trading company] so ratepayers have to wear it'.

Clark believed the council's staff wages bill was a major driver for the high rates increase, but a council spokeswoman disputed this.

The council's wage budget was under budget for the first 9 months of the financial year, she said. 

The budget for staff wages in 2017/18 was $24.5 million and in 2018/19 it was $24.8 million, an increase of around $300,000 or 0.5 per cent of the rates increase, the council spokeswoman said.  

Invercargill Mayor Tim Shadbolt, during the meeting, said the council had done well compared to Dunedin, which had a rates increase of nearly 8 per cent.

He understood the Invercargill City Council rates hike was about in the middle compared to the rest of the country's councils.

The council also revealed its forecasted rates hikes for the next decade, with the figures impacted by spending decisions made at last week's long term plan meeting.

This included committing to $9.5m towards a museum redevelopment in the next five years, begin funding an arts and creativity centre in 2018-19, strengthening Anderson House in 2019-20, funding an additional pool at Splash Palace in 2023-24 and funding an alternative water supply from 2025-26.

The highest forecasted rates hike in the next decade is 5.14 per cent in 2022-23 and the lowest figure  is 3.05 per cent in 2027-28.

Cr Toni Biddle said the council had kept its rates increases steady and had not been ridiculous in its expectations.

The museum closure had overshadowed the work done by the council, which had some exciting projects ahead.

The city was getting a lot in the next six to 10 years, Biddle said.

'At the beginning we talked about being transformative and I think we have really done that.'

Forecasted rates hikes from 2019-20:

2019-20: 3.14 per cent

2020-21: 3.53 per cent

2021-22: 3.44 per cent

2022-23: 5.14 per cent

2023-24: 4.66 per cent

2024-25: 3.70 per cent

2025-26: 3.60 per cent

2026-27: 5.09 per cent

2027-28: 3.05 per cent