Whangārei 17.2 per cent rates rise ‘unaffordable’, ‘irresponsible’, critics say

Whangārei mayor Vince Cocurullo says the council is facing increased costs, such as for repairing its roads and building bridges. Photo / Michael Cunningham

A 17.2 per cent rates rise proposed by Whangārei District Council is unaffordable in the current cost-of-living crisis, Whangārei leaders say.

But the council said it is facing huge rises in infrastructure costs, a growing district and residents who want more things done.

Mayor Vince Cocurullo said people who do not agree with the rates rise should say what should be cut, with submissions closing Thursday on the council’s draft Long Term Plan, which covers the next 10 years.

The council is proposing a 17.2 per cent increase this year, and increases of 7.5 per cent plus local government inflation in both 2025 and 2026.

Former councillor Brian McLachlan said the increase is irresponsible in the current cost-of-living crisis, and will be unaffordable for ratepayers, including Whangārei’s numerous pensioners.

“The council is just thumbing its nose at ratepayers,” he said.

Costs could be cut by the council focusing on its core business, as well as selling some of its commercial property, McLachlan said.

Businesses already impacted by the cost-of-living crisis are also set to feel the brunt of the rates rises, said NorthChamber president Tim Robinson.

While the proposed rates increase of 17.2 per cent is across all sectors of the district, commercial properties pay a differential which means they are charged between six and eight times more than a residential property of the same land value, he said.

Local Government NZ said the average rates rise across New Zealand is 15 per cent this year due to increased costs, and it is calling on central government to return the GST it collects on rates, to help relieve the burden on ratepayers.

Savings could be made, McLachlan says

Commercial property development and business growth are two areas that McLachlan said the council could make savings on.

The council proposes to spend $1.3m a year from 2025 on developing its $30m commercial property portfolio, with the aim of speeding up the pace of central Whangārei development and potentially delivering a return to the council.

Former councillor Brian McLachlan, pictured in 2015, says the council needs to try harder to make savings instead of putting costs on ratepayers. Photo / Michael Cunningham

It plans to set up a council-controlled organisation or council-controlled trading organisation such as Far North District Council’s Far North Holdings.

But Mclachlan said the plan for spending the $1.3 million is not clear and nor is the potential return.

“They would be better off selling the commercial properties and putting this back into infrastructure, and that would relieve the burden on ratepayers.”

Mclachlan said if the council is solely driven by making money from its assets, it could invest the $30m in commercial stocks on the stock exchange, which would deliver a less-risky but better return.

He would also like the council to can its plan to become a shareholder of economic development agency Northland Inc, at a cost of $852,000 over two years - on top of the $105,000 a year the council already funds.

Mclachlan said Whangārei is already a thriving city and got to this point without being a Northland Inc shareholder.

Council costs have increased, Cocurullo says

But Cocurullo said the council is facing higher costs, such as a 38 per cent increase in maintaining and building bridges and 27 per cent increase in roading costs over the past three years.

“For us to clean the gutters, fix the footpaths and fix the roads it all costs money ... 17.2 per cent is the only way that we can cover the work that has to be done and to keep our maintenance at levels that are acceptable.”

Cocurullo said those who do not agree with the increase need to tell the council what they are prepared to see cut.

While one option is to sell the council’s commercial properties to offset the rises but this would only be a short-term fix for the rising costs, he said.

“A sell-off has been done in the past but others say it’s selling the silverware and not fixing the problem: tomorrow you end up with the same problem and have nothing else to sell.”

The proposal to create a council-controlled organisation to manage the commercial portfolio is about generating income to help off-set rates, as well as having more flexibility - such as potentially taking loans against the property or investing outside of Whangārei, Cocurullo said.

Becoming a shareholder in Northland Inc would not only allow the council to have more say in how the economic development agency runs, it would also show central government the unity of Northland councils, potentially unlocking more funding, he said.

Northland Regional, Kaipara District and Far North District councils are all already Northland Inc shareholders, he said.

Check rates and add in your submissions

Both sides of the debate are encouraging ratepayers to check what their rates will be with the increase, with the council providing an online database showing the proposed rates breakdown.

Submissions on the Long Term Plan, including the proposed rates rises, close at 5pm on Thursday and more information is available online.

Denise Piper is a news reporter for the Northern Advocate, focusing on health and business. She has more than 20 years in journalism and is passionate about covering stories that make a difference.