Gisborne District Council opposes LGNZ campaign against rates caps

Local Government Minister Simon Watts. Photo / Alex Burton

The Gisborne Mayor has voted against a Local Government New Zealand push to campaign against rates-capping.

Local Government Minister Simon Watts has said he wants rates-capping “in place as fast as possible”.

However, more than 80% of Local Government New Zealand (LGNZ) members voted for LGNZ to actively campaign against the Government’s rates-capping process at their annual conference in Christchurch on Wednesday.

Gisborne Mayor Rehette Stoltz said she voted against the campaign by LGNZ – a national body which represents councils across the country.

After thorough council discussions last week, Stoltz said she voted no on behalf of Gisborne District Council representatives.

“We will have another opportunity to vote on this after the elections, once more details are available.”

Stoltz said the council would wait for more information before determining how possible rate caps might affect the region.

“The devil will be in the details.”

Gisborne residents faced an average 9.95% rate increase this year.

The Government was looking at rate caps on non-core spending. However, it remained unclear what it would define as “non-core”, Stoltz said.

“There are examples across the world – both successful and unsuccessful – that they are investigating to see if there is a fit-for-purpose model for New Zealand.”

LGNZ chief executive Susan Freeman-Greene said evidence from jurisdictions with a rates cap, such as New South Wales, showed that the policy would have a significant impact on the delivery of core infrastructure and services, hampering local economic growth.

“LGNZ advocates for local decision-making, and a central government-enforced, one-size-fits-all rates cap takes decisions away from local communities,” Freeman-Greene said.

Any decisions regarding a public campaign will be made by the next cohort of elected members after the local elections in October.

Freeman-Greene said as more than 80% of the membership agreed to LGNZ’s current direction of travel, it meant they would continue with their current evidence-based advocacy.

Watts told Local Democracy Reporting no decisions had been made regarding the rates-capping system. However, the Government had been undertaking policy work.

“I will bring advice back to Cabinet for consideration later this year.”

Watts said he intended to progress work on a rates-capping system suited to New Zealand that was flexible enough to support housing growth aspirations and would allow councils to respond to the infrastructure deficit, while limiting spending on “nice-to-haves”.

The Government wanted to ensure ratepayers were getting value for money, he said.

“With issues like average rate increases in 2024 of 9.6% versus CPI inflation at 2.2%, constraining rate increases is an option we are actively considering.”

Watts said the announced changes to local government were focused on “providing stronger transparency and accountability requirements to help shine a light on council progress and spending”.

From 2024 to 2027, Gisborne District Council forecasts that rate increases will be no more than 11.4%.

This plan firmly focused on core spending, Stoltz said.

“We currently spend 80-85% on roads, our Four Waters, solid waste and Category 3 buyouts – absolute core functions.

“Another 8-10% is spent on other core activities essential for our region to thrive like sports fields, reserves, library, museum, theatres and protecting our water pipe.

“Less than 5% will be spent on our pool’s outdoor area, our CBD revitalisation and investigating the indoor multipurpose stadium.”