Excessive Hamilton City and Waikato Regional Rate Increases

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#3004953 3-Dec-2022 06:56

scuwp: The other grating thing this time around is the valuations were done during the property peak...now things have dropped, we are still stuck paying based on the premium values for the next couple of years

Everyone's rates are rated based on the same valuation date, so no one is disadvantaged by property prices falling, unless your property value both rose faster than average and fell faster than average.
It's basically your share of the total housing stock in your area. The values move but more or less your percentage won't change.

As a side note, everyone will be facing large rates hikes in the coming year - labour costs are up over 5%, interest rates rising, civil construction costs up 15%. I've heard one council flag that rising interest rates alone will drive a 3% rates rise in their area next year. This will be one of the toughest periods for council budgets (and rates) in a long time

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#3004956 3-Dec-2022 07:28

Geektastic: Rates are so old fashioned.

What does property value have to do with your use of services? Per capita based on adults living at the address is both more logical and fairer.

You mean better for you.

Eva888

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#3004964 3-Dec-2022 08:37

When cost of everything is rising and people can barely afford to feed their families plus pay rising mortgage rates you would think that Councils would be required to cut out all unnecessary spending like building cycleways and vanity projects and just stick to maintenance of existing infrastructure until the financial situation improves.

We are warned to stop spending for the sake of the economy and it’s what anyone struggling does naturally when times are tough, why doesn’t this apply to Councils (Wellington) ripping up perfectly good roads to accommodate a minority, or obsessing on killing the city to turn it into a dead walking and cycle mall taking away people’s livelihoods as shops close down in the process instead of cutting down on ALL spending to give people some respite. They refuse to listen to the room.

Why can’t rates go down instead of up during bad times.

Behodar

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#3004970 3-Dec-2022 08:49

Indeed. In 2020 the local council hiked rates due to "Covid costs". What costs? Things like the library would have been cheaper to run: Sure, you still need to pay staff, but you no longer need to run the computers, light the buildings, heat/cool the buildings, etc. All the incidental costs should have dropped.

What did they actually spend this extra money on? Apart from designing and printing their own signs to duplicate what people already knew from central government messaging, not a clue.

nickb800

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#3004981 3-Dec-2022 09:40

Behodar:

Indeed. In 2020 the local council hiked rates due to "Covid costs". What costs? Things like the library would have been cheaper to run: Sure, you still need to pay staff, but you no longer need to run the computers, light the buildings, heat/cool the buildings, etc. All the incidental costs should have dropped.

What did they actually spend this extra money on? Apart from designing and printing their own signs to duplicate what people already knew from central government messaging, not a clue.

COVID had big implications for running a large public facing workforce - greater allowance for sickness, separating teams to avoid risk of illness taking out a whole team etc. While some things like libraries may have saved operational costs, things with a user-pays element like pools, parking or public transport would have lost revenue but still faced the same sort of staffing costs.

The cutting the cloth argument is simple in theory but hard in practice - the reality is that local government does a bunch of things that appeal to different sub-groups, but often little that appeals to everyone. This makes it hard to get a clear signal from the community on what to cut.

sir1963

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#3005330 3-Dec-2022 19:27

Technofreak:

I have been discussing my rate increases with both the Hamilton City Council and the Waikato Regional Council.

HCC say there has been an average increase of 7% whereas mine went up 22% year on year.

WRC say their rate went up by an average of 7.7% whereas mine went up 31% year on year.

I don't know what others on here might think but but I consider those increases to be excessive. The answers I've been getting back seem to be smoke and mirrors to me.

Some of their reasoning was percentage increase in our property value was above average. Even if you allow for this it doesn't explain the huge increase.

I'm interested to know what other ratepayers in these areas have experienced.

Same B S here in Palmy, our rates went up by about 50%, ie $1000 a year

Apparently for some undefined reason business rates dropped and there way now way they could do anything about that except charge residents more.

There was....I don't know....a chance to change the multiplier they use so business rates at minimum stayed the same, or better yet rose by the 4% (or what ever it was) the council said they needed.

Just wait until the next rates bill, now sections can be 150m2 my land value will sky rocket to millionaire status because they will be able to fit in 6+ houses on our section

Handle9

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#3005335 3-Dec-2022 19:37

Eva888: When cost of everything is rising and people can barely afford to feed their families plus pay rising mortgage rates you would think that Councils would be required to cut out all unnecessary spending like building cycleways and vanity projects and just stick to maintenance of existing infrastructure until the financial situation improves.

We are warned to stop spending for the sake of the economy and it’s what anyone struggling does naturally when times are tough, why doesn’t this apply to Councils (Wellington) ripping up perfectly good roads to accommodate a minority, or obsessing on killing the city to turn it into a dead walking and cycle mall taking away people’s livelihoods as shops close down in the process instead of cutting down on ALL spending to give people some respite. They refuse to listen to the room.

Why can’t rates go down instead of up during bad times.

Welcome to the New Zealand infrastructure deficit. You’ve had the benefit of councils underspending for decades, now it’s time to pay the piper.

Sharesies

Trade NZ and US shares and funds with Sharesies (affiliate link).

insane

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#3005351 3-Dec-2022 21:04

Handle9:
Eva888: When cost of everything is rising and people can barely afford to feed their families plus pay rising mortgage rates you would think that Councils would be required to cut out all unnecessary spending like building cycleways and vanity projects and just stick to maintenance of existing infrastructure until the financial situation improves.

We are warned to stop spending for the sake of the economy and it’s what anyone struggling does naturally when times are tough, why doesn’t this apply to Councils (Wellington) ripping up perfectly good roads to accommodate a minority, or obsessing on killing the city to turn it into a dead walking and cycle mall taking away people’s livelihoods as shops close down in the process instead of cutting down on ALL spending to give people some respite. They refuse to listen to the room.

Why can’t rates go down instead of up during bad times.

Welcome to the New Zealand infrastructure deficit. You’ve had the benefit of councils underspending for decades, now it’s time to pay the piper.

I disagree. They have certainly been spending, but not in the right places. If it's been decades of under investment, then what was their plan to fix that, or were they just hoping to punt that problem onto the next mayor? If they were a normal business they would be insolvent based on their spending habits.

Any normal business would be limited by the customers price sensitivity. Jack the price too much and you loose too many customers. Unfortunately it's harder to pickup and move to new town or city than is it to purchase from a competing supplier.

If central and local government are not going to follow the Reserve banks recommendations, then they can't expect the general public to either.

Geektastic

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#3005367 3-Dec-2022 21:22

Handle9:
Geektastic: Rates are so old fashioned.

What does property value have to do with your use of services? Per capita based on adults living at the address is both more logical and fairer.

You mean better for you.

No. I mean what I wrote.

Geektastic

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#3005369 3-Dec-2022 21:24

Senecio:
Geektastic:

It would certainly be fairer than expecting 3% to foot 25% of the bill...

You haven’t quite grasped how taxes work?

Taxes are an intentional redistribution of wealth. So yes, 3% of the population should foot 25% of the bill.

Only if you agree that wealth should be redistributed. I don’t. Taxes should pay the running costs of basic government services and that’s all.

eonsim

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#3005421 3-Dec-2022 21:54

insane:
Handle9:

Welcome to the New Zealand infrastructure deficit. You’ve had the benefit of councils underspending for decades, now it’s time to pay the piper.

I disagree. They have certainly been spending, but not in the right places. If it's been decades of under investment, then what was their plan to fix that, or were they just hoping to punt that problem onto the next mayor? If they were a normal business they would be insolvent based on their spending habits.

Any normal business would be limited by the customers price sensitivity. Jack the price too much and you loose too many customers. Unfortunately it's harder to pickup and move to new town or city than is it to purchase from a competing supplier.

If central and local government are not going to follow the Reserve banks recommendations, then they can't expect the general public to either.

Decades of people voting for the councilors who yell rate cuts, then once elected realize they can't cut the rates or the sewage stops working. So instead they stop the rates rising, delay every thing they can or that people can't see (sewage, water, roads in poorer areas, public transport, cycle ways) while making sure the money gets spent 'properly' (fancy new roads in nice areas, vanity projects, widening the roads they use) until they no longer can get elected, leaving those who follow up with crumbling infrastructure, a shit load of dept eating up much of the cash flow from rates. Then the next poor council who final has collapsing infrastructure and need costly rebuilds (rather than preventative maintenance), has to put in place massive rate rises, to fund some of the replacement/repairs, which results in them getting booted at the next election and replaced by the mates of the original 'rates cut'/'tax payers union'/etc councilors or promptly slash all the repairs to the bone and repeat the process again.

Council rates should be indexed to inflation, plus they should get 1% from GST and get to slap a 0.5-5% progressive income plus a 1% company tax on all workers/businesses in their area legislated nationwide so nobody can escape it. Get the infrastructure fixed, and the funding proportion required to maintain that and core public services (public transport and cycle-ways, rubbish/recycling (recycling should probably be national), 3 waters, libraries (or make them national like schools), pools and parks) ring-fenced and indexed to inflation so that councilors can't decrease it only increase it temporarily and then make sure there is enough money left to pay down the debt at a decent rate. Once that's done in 10 or so years they can then start to reduce rates as the interest costs from the debt burden are removed.

MikeAqua

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#3005838 5-Dec-2022 10:11

I think that rate-payers everywhere should simply prepare themselves to pay more. Councils have underinvested in horizontal infrastructure for years to keep rates down. Now we have to pay to fix it, and it's going to cost more now than it did then.

I do find the indexing of rates to property value bizarre. It's valid argument that council services contribute somewhat to soem property values. A property is worth more if it has council services available (e.g. town supply water). However, that value is limited to the cost of building and operating an alternate system (rainwater tanks, pump and filters). This is a fixed amount that isn't proportional to property value.

The most expensive (and highest rated) property I own receives no to-property services at all. No sewage, no water, no rubbish collection, no footpath and the road is a state highway. I'd argue that council services contribute nothing at all to the value of that property. Of course I can use the parks and library (how quaint) but so can any person that comes to town from another region or even country.

Rating is basically a wealth tax, on non-liquid wealth which may not even translate into any substantial equity. Whether that's right or wrong is another discussion all together, but there should be honesty about what it actually is.

I also think the role of councils should be reviewed and limited to basic functions like horizontal infrastructure. They don't need to be spending money on bread and circuses.

Mike

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#3005907 5-Dec-2022 12:00

People are over thinking the rates vs poperty value thing. It has nothing to do with who consumes the most services. It's simply the easiest way for a council to determine who can pay the most. Rates need to be assessed against something and the council doesn't have access to your income statements. If you own a property that is twice as valuable as the guy down the road then you are deemed to be able to afford to pay more.

Again its just another simple redistribution of wealth.

It does unfairly impact some people. I'm thinking that widowed Grandmother who has lived in the same family home for 50yrs just one street back from the main street that is now worth millions because developers have turned everything nearby into apartments. In this case her children should be chipping in to help with her rates as they will benefit from the inheritance once she passes.

Kyanar

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#3005912 5-Dec-2022 12:07

Senecio:

It does unfairly impact some people. I'm thinking that widowed Grandmother who has lived in the same family home for 50yrs just one street back from the main street that is now worth millions because developers have turned everything nearby into apartments. In this case her children should be chipping in to help with her rates as they will benefit from the inheritance once she passes.

There are typically concessions for senior citizens and disability pensioners

Senecio

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#3005916 5-Dec-2022 12:16

Kyanar:

Senecio:

It does unfairly impact some people. I'm thinking that widowed Grandmother who has lived in the same family home for 50yrs just one street back from the main street that is now worth millions because developers have turned everything nearby into apartments. In this case her children should be chipping in to help with her rates as they will benefit from the inheritance once she passes.

There are typically concessions for senior citizens and disability pensioners

And so there should be.

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