Covid 19 coronavirus: The cost of a zero rates increase for Wellington revealed

Wellington City Council is grappling with the economic fallout of Covid-19. Photo / Mark Mitchell.

It's estimated a 0 per cent rates increase for Wellington City would add $16 million of debt funding and a rates increase of up to 15 per cent the following year.

The council is facing a $70 million shortfall for the 2020/21 year as its revenue streams dry up in the Covid-19 pandemic.

Yesterday the city council's top brass met councillors in a workshop behind closed doors to discuss the organisation's pandemic response and recovery plan.

Those included proposals for a six-month rates deferral, free parking until June, and fee freezes and refunds.

A PowerPoint presentation from the meeting has been made public but a four-page document outlining the financial impacts of possible responses was not.

It's understood that document estimated not increasing rates for the 2020/21 year would increase debt by $16m and rates would rise up to 15 per cent the following year.

Usually bustling streets like Waterloo Quay in Wellington are near deserted during lockdown. Photo / Mark Mitchell.

Mostcouncillors yesterday signed an email to council chief executive Barbara McKerrow asking officers to present them with a full zero rates and user charges freeze proposal.

"We are listening to Wellingtonians and want to address their immediate needs in this time of crisis," the email said.

"We know that in the future, we will need to work with Wellingtonians on future revenue generating including rate rises."

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Councillor Nicola Young said she wanted to see the proposal so her colleagues and the public could understand how unrealistic it was.

"It would be short-term gain, but in the medium term a lot of pain.

"There's no point in having an easier year this year but really socking it to people next year."

Young said it was good opportunity to get rid of the "nice to haves" on the council's books to help keep rates down.

"Council has extensive powers to take money from people and we have to use those powers very carefully, because if we make the rates too high we're just going to price people out of Wellington."

Councillor Fleur Fitzsimons said they had to look at the zero option so they could tell Wellingtonians they tried.

"I want to be able to justify anything but zero and at the moment we haven't been provided with full advice about what the impact would be."

Councillor Diane Calvert said the option needed to be public, and not discussed behind closed doors.

"It's ratepayer money we're using and it's something that we need to be transparent about.

"A lot of people are calling for it but like anything there are pros and cons and we need the information to get the right mix."

• Covid19.govt.nz: The Government's official Covid-19 advisory website

Councillors have been given until 5pm today to provide feedback on the proposals. An emergency council meeting has been scheduled for next Thursday and will be held via Zoom.