An average rates increase of 3.7 per cent was approved by Whanganui District councillors when they adopted the annual plan on Thursday.

The figure is an increase of 0.2 per cent on that previously identified in the council's Long Term Plan.

On average residential rates are up 4 per cent, farming is up 4.6 per cent, lifestyle is up 4.3 per cent and commercial is up 2 per cent.

It means an average increase of $116 for the 2019/2020 year.

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At council's meeting to approve the rise, general manager of finance Mike Fermor outlined the increases in capital value over the last year.

Residential capital value is up $53.8 million for a rates collection of $368,222, while commercial capital value is up $5.3 million for a collection of $26,763.

Overall, the district's capital value growth was recorded at $61.3 million, with rates from these properties amounting to $419,240.

At the meeting Mayor Hamish McDouall indicated he wanted council to push for other revenue gathering methods.

"Rates are a very unideal way of a territorial authority to gain revenue, and we've got a chance over the next few months to implore the Government via the Productivity Commission to look at different ways and fairer ways of funding what is a great deal of activity that's going on out there," he said.

"There is a lot more building going on, trying to get a tradie to do a renovation and you'll be struggling which is exciting, but equally there are people for whom the bill that drops through the door will be a considerable part of their income, I know we all think of particular individuals around that time."