22 Oct 2008

Councils cut budgets to keep rate rises down

4:00 pm on 22 October 2008

Local Government New Zealand says councils are trying to keep rate rises to a minimum.

The organisation says a survey of 80 councils shows all are trying to cut their spending. Double-digit increases have previously been the norm for many.

New property valuations in Auckland City revealed an average 13.4% increase on Tuesday.

Auckland City Council's current forecast is for rate increases of 34% over the next three years. The council wants to keep rates at about 5% a year - the current inflation rate.

While times seem difficult now, Mayor John Banks says they will get worse - and this means a number of projects face the axe.

Mr Banks told Morning Report on Wednesday that people are hurting, including well-off families.

Christchurch Mayor Bob Parker said his council is aiming for a maximum 5% increase, in line with inflation.

In Nelson, where rates rose this year by over 11%, Mayor Kerry Marshall says ratepayers are objecting to new spending, such as upgrading the city's main sports venue.

Canterbury Regional Council is trying to trim a proposed general rate increase of more than 17% - councillors have reduced that to 14%. However, chair Sir Kerry Burke says it will be tough to make further cuts.

The impact of the global credit crunch came home last week to Dunedin City Council, after it failed to place all of a $20 million bond issue.