Lowest Rates Rise in Years

1 April 2010

Wellington City Council's 2010/11 draft Annual Plan sets out what we propose to do in the coming year and how we'll pay for it, and we'd like to know what you think.

Your rates go towards essential services - roads, sewerage and water

Your rates go towards essential services - roads, sewerage and water

If approved, the plan will result in an overall average real rates increase of 2.88 percent - the lowest for the commercial and residential sectors for seven years and well below the 5.38 percent overall average real rates increase forecast in our Long-Term Council Community Plan.

This has been achieved through a continuing drive to find ways to provide services more cost-effectively and lower than expected inflation and interest expenses.

The vast majority of spending proposed through this year's draft Annual Plan is in line with our long-term plan, which was agreed last year following extensive public consultation. It will pay for essentials like maintaining and improving our roads, footpaths, drains, water network and reservoirs, taking care of the city's parks, bush and coastal areas as well as funding recreational and social services and events. The proposed new projects account for less than 1 percent of rates.

The actual movement in individual rates bills will vary depending on the changes in capital value and on the effect of the rates differential between businesses and households. This means differing impacts on different sectors - on average about a 5.5 percent real rates increase for the residential sector and a near zero rise for the city's commercial sector.

We have traditionally charged the commercial sector significantly more in rates than residents but since 2000 we have gradually altered the differential (the ratio that determines how much of the general rates take the commercial and residential sectors pay) to reduce the burden on businesses to a fairer level.

This doesn't mean residents will end up paying more than commercial ratepayers. Even next year - at the end of this gradual transition - commercial ratepayers will still be subsidising the residential sector by something like $31 million.

Mayor Kerry Prendergast says the Council's aim in preparing its draft plan has been to balance the needs of the city's many communities and present and future generations, maintain services at current levels, retain the city's vibrant character and keep the rates increase as low as possible.

"Although the recession may be officially over and there are signs that business confidence is starting to pick up, we're very conscious that there are businesses and people under considerable pressure who have yet to feel the effects of the improving economy," she says.

To have your say on the draft Annual Plan, visit the Public Input section of this site. The consultation is open from 9 April 2010 until 10 May 2010.