Nelson Challenges Government As 8.2% Rates Hike Confirmed

Friday, 28 June 2024, 8:44 pm
Article: Max Frethey - Local Democracy Reporter

Nelson’s representatives have taken aim at the Government to ease the financial pressure on residents as the city’s rates are hiked.

On Thursday morning, a rates increase of 8.2 per cent was unanimously agreed to by Nelson City Council.

If the annual $300 storm recovery charge is included in that figure, the rates increase jumps to 15.3 per cent.

“The scale of the rate increase … is going to be a significant hit for every household and budget,” Mayor Nick Smith said.

Like other councils across the country, Nelson City has been putting together its Long Term Plan for the next decade, but has faced economic headwinds while having the additional burden of a $60 million bill from the August 2022 storm.

Smith said several “tough calls” on funding have been made and efficiencies have been found, but that he will continue to encourage council staff to deliver good value for money.

Despite the savings, a rates hike couldn’t be avoided with councillors determined not to drastically cut back council services or completely stop investment into civic and community facilities.

Councillor Mel Courtney called for “urgent action” from the Government to “lessen the burden on ratepayers” by returning the GST that councils paid on their rates.

In 2022, Nelson paid the Government $11.16 million of GST on its rate take – equivalent to about 9 per cent of the council’s operating income.

“Local government is the foundation of our democracy and it must be funded adequately and appropriately. Relying on rates to support this council’s activities is, in my judgement, is unsustainable,” Courtney said.

“Isn’t it about time they paid rates on all of the Government-owned property in Nelson as well?” agreed councillor Pete Rainey.

Rainey also called for the Government to stop its “unacceptable intrusion” into the city’s affairs on matters like setting speed limits and Māori representation issues.

“Let us make our own local decisions on local issues.”

Councillor Trudie Brand reflected on the city’s approach to rebuilding after the August 2022 weather event, particularly regarding the council’s decision to buy-out property owners where the cost of repair was great than the price of the property.

She challenged the Government to review the role of the Earthquake Commission and insurance providers as storm events grow more frequent and more damaging.

Smith agreed, saying that the annual $300 storm recovery charge was an example of Nelson “picking up the pieces of inadequate systems at central government”.

He said the Government needed to develop longer-term solutions for how to respond to the effects of storm events and improve climate change resilience in local communities.

Smith, however, also said Nelson would not underinvest in its infrastructure over the next decade as other councils have done in the past, highlighting $826 million of planned investment while maintaining a balanced budget.

“We are wisely investing in the infrastructure for this community,” he said.

And while the council is not planning any “huge” civic projects for the immediate future, several smaller investments are being made.

Over the next three years, the council has allocated about $1.6 million to buy a building to house an arts hub for the city, while $3.3 million has been earmarked for a new surf lifesaving club building, with the club covering half the costs.

“A city though that is not investing at all in its civic facilities and community facilities is going backwards,” Smith said.

However, a proposal to build or investigate an all-weather artificial sports turf was dropped from the final Long Term Plan.

Councillor Tim Skinner expressed reservations about the “eye-watering” levels of council spending and debt forecast over the next ten years.

The council’s operating yearly expenditure is set to increase to more than $250 million in 2033/34, up $80 million when compared to 2023/24.

Council debt is also expected to reach half a billion dollars in the same period.

However, while he has voted against Long Term Plans for the same reasons in the past, he feels that this year’s plan is reflective of what the community asked for.

“Our scope has got so broad, but then the public … have asked more of us.”

The average rates rise across the country is currently about 16 per cent.

Local Government Minister Simeon Brown has previously said councils need to keep an eye on their spending and prioritise the must-haves.

The government has ruled out sharing GST on rates with councils, but is looking at sharing a portion of GST collected on new residential builds with councils.

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