Hastings has projected debt rising from $400 million to $700m by 2030, writes Nick Stewart.
Nick Stewart is a financial adviser and CEO at Stewart Group.
When Statistics New Zealand announced that local authority rates contributed 13% of total national inflation, it quietly documented the biggest wealth transfer from private citizens to local body bureaucrats in New Zealand’s peacetime history.
The numbers don’t lie, even when councils obfuscate.
Let’s start with facts that every ratepayer can verify, from Stats NZ:
National inflation hit 2.7% in June 2025.
Council rates increased 12.2% annually.¹
The Taxpayers’ Union documents cumulative rate increases of 34.52% over three years whilst inflation totalled just 13.7%.
This is systematic wealth confiscation by people who face no market discipline for their decisions, and the Hastings District Council provides a fine example of the melee ahead. Yet, Hastings is simply one example among many bad apples across NZ.
Rate increases, or daylight robbery?
In Hastings, ratepayers who budgeted for normal 3-4% increases got hammered with 19% in 2024-25, followed by 15% in 2025-26.
That’s a compound 37% increase over two years for Hastings ratepayers. An average Hastings family paying $3000 in rates now face $4300 annually – that’s $1300 extracted from household budgets that could have funded children’s education or emergency savings.
The timing makes this especially vicious. Right as petrol prices fell 8% – providing families with a glimmer of relief – councils threw on rate increases that more than wiped out these savings. It’s almost as if they calculated how much breathing room households gained … then took it.
Hastings has projected debt rising from $400 million to $700m by 2030. We’re witnessing a council that has grown beyond what its ratepayer base can sustain.
The rider has become heavier than the horse, which spells eventual capitulation.
Every private business understands that customers have a finite capacity to pay. Exceed that capacity and customers disappear. Councils operate under no such constraint. They simply send bigger bills to ratepayers who can’t escape.
Like the pigs in Orwell’s Animal Farm, today’s councillors have forgotten they’re supposed to serve ratepayers – not rule them. While private-sector businesses slash costs and implement redundancies to survive, councils expand their fiefdoms with impunity.
The contrast couldn’t be starker. Business managers whose jobs depend on efficiency face market discipline daily.
Councillors face elections every three years, where complex budget decisions get reduced to campaign slogans. Meanwhile, they enjoy inflation-plus salary increases and gold-plated job security while imposing austerity on the very ratepayers who fund them.
Richardson’s Democratic Solution
Ruth Richardson captures the fundamental problem: councils have become “arrogant”, “unaccountable”, and “wasteful” and “have got to be brought to heel”. Her proposed solution cuts through the bureaucratic nonsense: cap rate increases at inflation unless ratepayers approve higher amounts through binding referenda.
This isn’t radical – it’s basic democratic consent for taxation. An inflation cap would restore planning certainty overnight whilst forcing councils to choose between genuine necessities and bureaucratic empire-building.
Critics claim this assumes ratepayers lack perfect information about “complex” infrastructure trade-offs, but that misses the point entirely. The current system assumes councils have perfect information about ratepayers’ financial capacity – an assumption that Hastings’ compound 37% increase rudely disproves. When families face financial warfare dressed up as fiscal responsibility, the “complexity” argument becomes irrelevant.
Hastings, the bellwether?
The upcoming Hastings mayoral election represents more than political choice – it’s an opportunity for forensic examination of fiscal responsibility: every council vote recorded, every budget decision documented, and no way for candidates to escape their fiscal DNA through clever spin and newfound fiscal enlightenment.
Some councillors already express concern about “diminishing borrowing capacity” – a tacit admission that current spending is unsustainable.
When the reality finally penetrates the bureaucratic bubble, it’s too late for the ratepayers. This same dynamic is playing out from Auckland to Invercargill.
Yes, New Zealand faces genuine infrastructure challenges. Ageing water systems, earthquake strengthening, and climate adaptation create real costs. But this reality has become the perfect smokescreen for herculean spending growth.
The question isn’t whether infrastructure needs exist. The infrastructure bill was always coming due. It’s whether councils have used it to justify spending that extends far beyond pipes and roads – into glamour projects, consultant fees and bureaucratic expansion.
Again – when the rider becomes heavier than the horse, the system collapses regardless of how noble the rider’s intentions.
Why can’t RBNZ just drive rates down?
The Reserve Bank faces an impossible choice. It cannot provide the interest rate relief the rest of us desperately need whilst councils pump 13% of total inflation into the economy.
We all need to row the boat and play our part – including the public sector. A dollar is a dollar, whether it comes from a rates bill or a grocery receipt.
When councils exempt themselves from inflation discipline, they force the RBNZ to keep interest rates higher for longer – crushing mortgage holders and businesses who had no say in council spending decisions.
Every responsible household and business starts the year with careful financial planning. These assume government costs increase roughly in line with inflation – a reasonable expectation in a functioning democracy. The problem lies in the fact that our councils have abandoned this social contract.
When rates contribute 13% of national inflation whilst representing a fraction of household spending, councils have become the primary destroyer of private planning. Families who budget carefully find their fiscal discipline rendered meaningless by public sector excess they cannot control or escape.
Voters, now’s your chance …
Real reform requires acknowledging that councils have become the enemy of household financial stability.
October’s elections offer a chance to demand proven fiscal discipline, not conversion stories. The question isn’t whether New Zealand can afford fiscal responsibility – it’s whether families and businesses can survive another term of public sector excess.
The arithmetic doesn’t lie. It simply raises the question of whether voters will finally hold councils accountable for the mathematical reality they’ve created.