NEXT EVENT - RMA PANEL |TUESDAY 17th MARCH 2026 | 6.00PM START | BARRACKS AMMO MEETING ROOM | 170 ST HILL STREET
Excerpt from Whanganui District Council Website
The government has announced its intention to introduce a rates cap and has begun consultation with stakeholders. This consultation runs through to February 2026, with further opportunities for engagement expected through the legislative process later next year.
Mayor Andrew Tripe says, “The government’s proposal comes at a time when Whanganui is well positioned to respond, due to disciplined financial management and a focus on affordability, but also at a time when local government is facing an unprecedented wave of reform.
“At this early stage, we will need to see more detail about how the proposed system would operate before we can fully understand its implications for Whanganui. When we prepare our next long-term plan, we will be able to assess the full impact of this policy on our finances, our services, and our community.”
He says the government’s move toward a rates cap has been well signalled. “I welcome greater fiscal discipline across the sector and Whanganui has demonstrated this in recent years. It is important we continue to provide household and business budgets with greater certainty and affordability.
“At the same time, let’s not lose sight of the wider picture: electricity and insurance have both increased by more than 10 percent in the last year, and central government tax revenue has grown by over six percent.
“Local government has become the focus of public pressure and I’m willing to own our part in that,” says the mayor, “but it’s important the public understands the full cost landscape.
“A clear and fair framework that guides rates growth can help councils remain focused on the essentials: roads, water, rubbish, and core services.”
He says, “Whanganui has already demonstrated strong fiscal leadership. We delivered the lowest average rates rise in New Zealand this year at just 2.2 percent. That reflects our disciplined spending and our commitment to ensuring every ratepayer dollar counts.
“Any national cap must still allow councils to invest in essential long-term infrastructure. More than 90 percent of our capital investment in the current long-term plan is in infrastructure and I am keen to see that type of investment continue. We are focused on the basics, but the basics are increasingly expensive to deliver.”
Mayor Andrew says a strict rates cap also creates risk. “If the costs of delivering essential services continue to rise faster than a capped rate increase, councils will face difficult decisions.”
The cost of resealing a kilometre of road more than doubled between 2017 and 2023. “For the same money, we can now resurface less than half the distance we could five years ago. Civil construction costs have climbed sharply. Gas prices increased by around 90% last year alone, and electricity costs are predicted to rise substantially when our contract expires in 2026.
He says rates make up a small proportion of the total taxes property owners pay, but they are essential for maintaining the infrastructure that keeps communities functioning. “If the council is unable to increase rates to meet rising costs, other options may need to be considered.
“If a cap does not keep pace with the rising cost of delivering essential services, councils may need to look at alternatives, including changes to service levels and increases to user fees. These are difficult conversations, and we will work hard to avoid having to have them, but it's important the public understands the implications of a strict cap.”
Do you support the Government’s plan to cap annual council rates increases at 2-4% per capita? Why or why not?
What difference would a rates cap make for households in this district, given recent rates rises?
Do you believe the cap will force the council to prioritise better, or could it limit essential services and infrastructure investment?
How concerned are you about the state of local infrastructure, and do you think a capped rates model will make it harder for councils to fix long-term problems?
The Government says councils can only exceed the cap in extreme circumstances such as natural disasters. Do you think that provides enough flexibility for storm repairs and recovery costs?
Do you think councils should be given alternative funding tools (e.g., tourism levies, targeted funds, tax-sharing arrangements), or is strictly limiting rates the best approach?
Do you think the council has been transparent enough about its spending, debt levels and long-term financial risks?
For the most part, our members support a rate's cap but are clear that this would not be a complete solution. In theory a cap may encourage councils to think twice before committing to new spending but it does not address inefficiencies and bureaucratic decision-making that drive up costs and debt.
Whanganui's infrastructure looks to be generally in good shape. However a hard cap runs the risk of putting off essential maintenance or increasing borrowing which will simply shift higher costs onto future ratepayers. Members favoured targeted spending controls that would protect necessary infrastructure investment while limiting non-essential expenditure.
The direct financial relief from a cap for households may be modest but there was greater value placed on the certainty of knowing financial outgoings without any major surprises. There is also support for planned disaster funding and self-insurance mechanisms to avoid sudden rate rises - at this time we are not aware of a council-funded 'disaster reserve' outside of the combination of rates, debt and insurances.
Bottom line: A rates cap can help but without tackling council inefficiency, poor accountability and unnecessary bureaucracy it will simply shift costs rather than fix the problem.