Rising Costs Impact 2023/24 Rate Increase

Despite cost increases of up to 20%, South Taranaki District councillors tried to minimise the impact on ratepayers when they approved a 7.19% rate increase for its 2023-2024 Annual Plan at Monday’s (1 May) Policy and Strategy Meeting.

South Taranaki Mayor, Phil Nixon says most councils around the country are facing similar rates increases, in some cases double digit rate increases. But by undertaking a range of cost cutting measures and redirecting some government funding, the Council had managed to keep the rate increase around the rate of inflation, without cuts to any services.

“Like households and businesses across the country, Council is facing increased costs for the things we buy,” says Mayor Nixon. “Local Government inflation has risen by around 20% over the last two years, for things like fuel, bitumen, and electricity. Contractors’ costs have increased by 16%, insurance and compliance costs driven by government requirements have increased considerably and interest rate increases have raised the cost of borrowing and financing debt,” he says.

Previously in its Long-Term Plan Council had anticipated a 4.72% rate increase for 2023/24.

“As a Council we are always very conscious about keeping costs to our ratepayers down and over the last seven years we’ve had a relatively modest average annual rate increase of 2.59%, including a zero % increase in 2020/21 when we were trying to help businesses and households affected by the Covid lockdowns,” says Mayor Nixon.

“This year we’ve worked hard to minimise the impact of cost increases on ratepayers as much as possible by undertaking a number of measures such as not increasing our funded depreciation, reducing overall salary and training budgets, increasing some user fees and charges, spreading capital projects over a longer period of time and using reserves where available. As a result, we’ve been able to get our rate increase below local government inflation without cutting any of our service levels,” he says.

Some of the user fees and charges to increase include the kerbside rubbish and recycling collection fee going from $195.50 to $220 and the dog registration fee going from $155 to $175.

Mayor Nixon says the Council has also applied to the Department of Internal Affairs to redirect $1.12 million of the Government’s $4 million Better Off funding to go towards its Digital Transformation project and District Plan Review.

The Council will formally approve its 2023/24 Annual Plan on 26 June.

ENDS