Yesterday

Share this story

Christchurch City Council staff have outlined concerns about the Government’s proposal to cap annual rates increases at 2% to 4%.

During a workshop with councillors today, staff emphasised that while they support a prudent approach to managing rates, the cap as currently designed is “unrealistic and unworkable”.

They cautioned that the model could force cuts to essential services, drive up fees and charges, delay critical infrastructure renewal, and increase reliance on debt – ultimately raising long‑term costs for communities.

“We absolutely understand why people want rates restraint – households are under real pressure and recent surveys indicate people support keeping increases low,” says Chief Executive Mary Richardson.

“The issue here isn’t the intention, it’s the mechanism. We need a model that reduces pressure without hollowing out services, stalling development or pushing the bill onto future generations.”

The Council’s analysis shows that even a 4% cap would leave the Council $80.3 million short by 2029/30, requiring $28 million in savings in the first year and rising to $122.4 million by 2033/34.

To illustrate the scale of the challenge, the projected 2027/28 annual net operational budgets include $34.7 million for libraries, $29.6 million for recreation facilities, and $15.4 million for events and economic development initiatives. Servicing borrowing for the Council’s capital programme requires $91.1 million in rates each year.

The draft submission notes that the Consumer Price Index used in the Government’s model does not reflect the inflation councils face for construction, infrastructure, and maintenance.

It also advises against the use of national GDP growth as a proxy for local demand, calling it a “blunt and poorly founded” measure that ignores regional differences and the pressures facing high‑growth cities.

“We’re keen to work with the Government to find an approach that’s both affordable for households and realistic for councils. More accurate inflation settings, three waters exemptions, and fairer funding tools would go a long way toward achieving that,” Ms Richardson says.

Council staff will incorporate feedback from today’s workshop, finalise the draft submission for approval on 4 February, and submit it to the Government on the same day.