One of New Zealand’s leading economic commentators, Brad Olsen, says people wouldn't like councils to stop paying contractors and consultants completely.
The wage bills being racked up by councils around Hawke’s Bay look high, but they’re hard to contextualise and it would be hard to argue what an acceptable amount is, a business expert says.
Figures, attained by Local Democracy, show five Hawke’s Bay councils spent in total more than $434 million on people costs in 2024.
However, the figure will be higher than that as some councils withheld contractors and/or consultants costs.
Napier City Council, in a bid to save $3m in labour costs for the 2025/6 financial year, is now reviewing its structure with a proposal to reshape its operations, which will affect more than 100 of its 785 jobs.
Hastings District Council has fewer permanent staff and spent $39 million on staff salaries in 2024, but its contractor and consultant bills were significantly higher at $241m.
Napier City Council spent $97m, the vast majority of that on staff salaries, with $24m going to contractors and consultants.
In Central Hawke’s Bay, spending on staff wages and consultants was just under $8.5m. No cost for contractors was provided.
In Wairoa, the cost of wages was just over $7m. No details for contractors or consultants were provided.
At Hawke’s Bay Regional Council, people costs were just over $42m. No information was given for contractors.
The average salary of a Hastings District Council worker in 2024 was $82,864 and in Napier it was $92,829.
The cost of staffing at Hawke’s Bay councils has been in the spotlight for years.
During a push for amalgamation it was noted by supporters of a singular council for the region that rivarly between neighbouring territorial authorities could drive up the cost of recruiting and retaining council staff.
Savings on people costs are also part of the reason Hawke’s Bay councils have opted for a region-wide Local Water Done Well model as their preferred option in ongoing consultation with the public.
Chief executive and principal economist at Infometrics and one of New Zealand’s leading economic commentators Brad Olsen said it was hard to contextualise what was a reasonable price for ratepayers to pay for staffing.
Olsen said there was a tendency to “vilify” contractor and consultant spending.
“But I don’t think that’s always warranted and is often a fairly surface-level concern.
“I don’t think people with concerns about contractor and consultant spending really want this to be cut to zero if it meant no roading or water infrastructure investment.
“There’s a clear and ongoing focus from councils to focus on delivering value for money, but costs for delivering council services continue to rise too, often above the rate of headline household inflation.
“Although headline consumer prices have increased 23% since the end of 2019, Infometrics analysis of Stats NZ capital cost data shows that the cost of delivering transport infrastructure has increased by an average of 25% over the same period, and delivering water infrastructure has seen a 32% cost increase.”
Olsen said contractors did what couldn’t be done in-house and plenty of that would have been required post-Cyclone in Hawke’s Bay.
“The scale of work can differ considerably between councils, and makes comparing spending levels challenging.
“For context, Hastings District Council’s Annual Report 2023/24 shows $169m in capital funding, while Napier had $35m, with the difference in spending size driven by the size and scale of the infrastructure task and area covered by territorial authorities,“ Olsen said.
Hastings Council, as of June 2024, employed 517 permanent and fixed-term fulltime and part-time staff (headcount) with a fulltime equivalent of 478 on an average salary of $82,864.
It paid $241m for the 23/24 financial year ($141.8m capital expenditure/$100m operational) to contractors and consultants including those involved in capital projects (things like road and bridge builds, demolition, three waters pipe facilities and networks) plus operational, a broad range from security services to key asset maintenance services, to expert and legal advice.
A spokesperson for the council said almost $46m of the operational spend was directly attributable to Cyclone Gabrielle, as was $56.3m of the capital spending.
The council is not planning any large-scale restructuring of its organisation in 2025.
CEO Nigel Bickle’s remuneration for the year ending June 2024 was $435,880.
The council says in October 2024 it agreed to a pay increase for Bickle from July 1, 2024, but he declined it.
All mayors’ salaries are set by the Remuneration Authority.
Hastings Mayor Sandra Hazlehurst was paid $166,910 for 2024/25.
This expires on June 30, 2025, when the authority will replace it with another determination.
The most recent mayoral pay increase was July 1, 2024, (when it was increased to the current amount). Before that, there had not been an increase since 2022.
Napier City Council employed 785 people with an average wage for fulltime staff as of February 28, 2025, of $92,829 including some who work 42.5 hours per week. ($43.46 per hour).
In 2024 it paid $24,449,562 (including GST) to 448 different suppliers for consultancy and contractor services.
The council says it relies on a diverse range of external contractors and consultants to support the delivery of essential services and infrastructure to the community.
“It includes critical areas such as roading, water services, and waste management, as well as specialist expertise for projects where it is more cost-effective or practical to engage external providers rather than maintaining in-house resources year-round.
“This approach ensures we can respond flexibly to project demands, access specialist skills when required, and maintain value for money for our ratepayers. The spending reflects the scale and complexity of the services we deliver, as well as our commitment to ensuring high-quality outcomes for the community.
”We monitor and manage contractor arrangements to ensure they deliver strong value and contribute effectively to our service delivery goals.”
The council supported regular (formal) working-from-home arrangements. When working from home on a regular basis, it is generally expected a maximum of two days per week (60% working in the office and 40% working from home) will be agreed on.
Its chief executive Louise Miller, who was employed on March 13, 2023, was paid $384,000 for 23/24. Mayor Kirsten Wise was paid $160,000 for the same period.
Central Hawke’s Bay District Council, as of June 30, 2024, employed 92.5 fulltime staff at an average wage of $84,288. Seven were externally funded and there were 10 vacancies. For the calendar year 2024 it paid eight consultants a total of $640,000 including GST.
A council spokesperson said they were doing the work like ordinary staff, and CHBDC paid them directly.
“We also have contractors employed, but these fall under contracts and we don’t have direct oversight of the number and how much they are paid. This includes the mahi to look after our water services, plants and reserves and roads.”
Chief executive Doug Tate’s salary was $257,852 at June 30, 2024.
Mayor Alex Walker’s salary is $119,272.
Wairoa District Council employs 89 staff, with an average wage of $82,340.
It said it would only provide information around its costs for consultants and contractors if required to under the Local Government Official Information Act.
“Given the amount of resource required to process it, we have decided to charge for making the requested information available”.
The first hour was free, but then the charge to collate the information would cost $38 for every half hour of work, estimated at four hours. Local Democracy Reporting declined the offer.
Mayor Craig Little was paid $116,979 for 23/24 and for 2024/25 $121,307.
The CEO’s salary for 2024 was $215,000.
Former CEO Kitea Tipuna resigned in April. Malcolm Alexander is now the interim chief executive.
At Hawke’s Bay Regional Council, there are 311.6 full fulltime staff (as of June 30, 2024) with an average pay of $96,776.34 - this includes the executive leadership team’s salaries.
In 23/24 HBRC spent $12,220,706.45 on consultants. This excludes professional (legal/audit etc.) fees and contractors and is only for external consultants.
No information was given for contractors.
Chief executive Dr Nic Peet’s current salary package is $356,536. Chair Hinewai Ormsby’s salary package for 23/24 is $148,043.
LDR is local body journalism co-funded by RNZ and NZ On Air.
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