Tararua District Council rates have been slashed thanks to greater efficiencies, with the average rate increase now just 1.61 per cent, down 1.3 per cent on what had been signalled earlier.

However, while rural ratepayers will face only a 0.88 per cent increase in their rates, upgrades to urban water and wastewater networks will result in a rate increase of 2.40 per cent for urban ratepayers and 2.85 per cent for industrial and commercial ratepayers.

"One of the major drivers in our urban sector rating is the significant investment in water and wastewater which we still haven't completed so over two years this sector will see an increase in rates," Raj Suppiah, council's chief financial officer said. "But without cutting back services we've been able to reduce our average rate significantly for the 2016/17 period and this shows we're taking into account affordability and sustainability."

To make the 1.3 per cent cut in rates has been possible by reducing council's finance costs, while revenue has increased from term deposits, Mr Suppiah said. "We want rates to be reducing and we need to ensure affordability and sustainability."

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Councillor Jim Crispin said he thought it was admirable the way Mr Suppiah and his finance team have listened to councillors and the community.

"This result is truly outstanding," he said. "It's a very, very good result."