Auckland Mayor Wayne Brown. Photo: MARIKA KHABAZI / RNZ
Auckland's mayor has hit out at the government's rates cap, saying the strategy "won't work" .
The government is setting a target range of 2 to 4 percent increases - with councils having to appeal to a regulator if they want to go higher.
The cap would take effect from 1 January 2027.
Auckland Mayor Wayne Brown took aim at the policy.
"How else does the government think we're going to pay for what Auckland needs and for things like the City Rail Link - which were the result of decisions made by previous governments and councils?
"Councils are faced with making decisions that involve significant investment and should not be restricted by government telling us what we can and can't do," Brown said.
He said imposing a rates cap on councils ignored the insight local government had on their own budgets and infrastructure needs.
"I'm an advocate for getting value for money for Aucklanders. That means knowing the problem we're fixing before we fix it. Putting a cap on rates isn't going to solve anything. It will just defer it for a couple of years then ratepayers will be paying even more," Brown said.
The mayor's criticism came on the back of his proposal for the 2026/2027 Annual Plan, which included a 7.9 percent residential rates increase, calculated primarily, Brown said, to fund the operation of the city's new City Rail Link (CRL).
"The main reason rates will go up next year is because we have to pay for the City Rail Link - a project the government is jointly responsible for. If they want a rates cap, we'll end up with a CRL with no trains or drivers," Brown said.
He said the cap would inhibit council's ability to adjust rates in response the tri-annual property revaluations.
"A better solution is for government to provide us with the ability to transition in rates increases or decreases resulting from rating valuation.
"Or perhaps the government could start paying rates on their own properties," Brown said.
But Local Government Minister Simon Watts told Morning Report, the rates cap was necessary as many ratepayers across New Zealand faced significant increases.
"I'm confident we'll work with councils to make this work," Watts said, "the reality is there are people in our community who don't have the ability to sustain in some cases, 20 percent increases per year."
Watts believed the government had given a "pretty sensible" band for rates.
"My challenge is making sure at a national level we have a model ratepayers can trust."
Watts said the detail of the rates cap would be worked through in the next year.
Gisborne District Council mayor Rehette Stoltz told Morning Report she felt as though the government had listened to discussions had with councils.
"We are happy with that flexible rate band, but we will be working with them to see what areas they classify as areas that we can ask exemptions for. So still a lot of detail we will be after."
Stoltz said what she was asking of the government was that the exemption process for councils was "nimble" and was fast enough to match the government's fast-tracking model.
"We will have to have those hard discussions as we head into our 10-year planning next year and if we then apply for exemptions."
Stoltz believed discussions would still happen locally and the rates cap would not change that.
"Still, it will be tough conversations going forward for every community in New Zealand."
Labour leader Chris Hipkins said the rates cap could mean families paid more for services, as councils tried to make up that shortfall.
He agreed rates rises in the double digits were "completely unsustainable," but "the real question we all need to ask ourselves is how are councils going to pay for what we need them to do over the next few decades".
"We can see that there's a real potential that things like water metering will be increased more widely, the price of buying water will go up for households, the price of putting out your rubbish each week [...], the price of taking your kids to the swimming pool could go up," he told Morning Report.
But he said Labour had not made any decisions about whether they would scrap the policy if they were elected next year.
"We haven't had a chance to have a look at it yet," he said. "We make those decisions as a team."
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