Taupō mayor says council prepared to apply rates cap sooner

Taupō District Mayor John Funnell says he’s ready to cap rate increases before they are required in 2029.

He was responding to the Government’s confirmation that councils must cap their rates increases to a maximum average of 4% a year.

However, he warned that something “had to give”. .

“We should not underestimate the impacts a rates cap could have on our ability to maintain current levels of service; something will have to give,” Funnell said.

“There will be difficult choices to make and it will be important that our community helps shape those decisions and understands the trade-offs involved.”

Local Government Minister Simon Watts issued an edict saying that from 2029, councils could not raise rates beyond an average of 4% a year.

Watts said it was time for councils to reel in spending and to focus on delivering basic services.

“For too long, ratepayers have been hit with steep and unexpected rates increases.

“Adding pressure to household budgets at a time many New Zealanders are already feeling the squeeze.”

Water services will be excluded from the rates cap. In extreme circumstances, such as acts of God, councils will have the power to request an exception to the new rules.

Average Taupō rates rises in the past four years were 6.6% in 2026, 8.4% in 2025, 11.8% in 2024 and 9.1% in 2023.

Estimated $34 annual savings per ratepayer

A Local Government NZ statement said rates capping would do little to alleviate the cost of living.

Local Government NZ operates as an advocate for councils.

President Rehette Stoltz said rates capping was a blunt instrument that would hamstring councils’ ability to maintain investment into essential services and infrastructure.

“Local government only gets 10% of the country’s tax take.

“But councils are responsible for about a third of all public infrastructure investment in New Zealand.”

Stoltz added that households would only save an estimated $34 a year, and that councils lacked the levers to raise revenue outside of rates.

She said this was urgently needed, since local government reforms had added more costs for council to meet.

“Official estimates show local government is facing around $860 million in implementation costs to get the new resource management system up and running.”

Ministers respond

RMA Reform Minister Chris Bishop told Local Democracy Reporting those implementation costs were calculated by independent consultants.

While he neither agreed nor disagreed with the $34 figure, he said the efficiencies gained from the reforms would yield long-term benefits.

“The reforms are expected to deliver ongoing net savings to councils of around $195 million per year.

“The Government is also committed to reducing councils’ costs further by investing in national digital planning and consenting tools and data systems.”

Watts said many ratepayers would save “more than just chump change” as the “days of double-digit yearly rates increases” ended.

He gave the example of Hamilton over the 2024-2034 Long-Term Plan. He estimated rates capping would save the average Hamilton household up to $15,842, or $1584 per year.

The will of the people

Funnell said his constituents had made it clear to his council that cutbacks must be made.

Taupō District Council recently decided to cancel the upcoming annual New Year’s Eve Big Bang Fireworks show. That saved an estimated $54,000 of ratepayer funds.

Funnell said his staff had been directed to identify further savings opportunities and will report back monthly.

But he also wanted people’s input. He asked that Taupō residents consider their highest priorities for council, and inform him of these when the 2027-37 Long-Term Plan consultations start.

Bronson Perich is a Local Democracy Reporting journalist for Taupō and South Waikato based at the Waikato Herald.

Bronson Perich is a Local Democracy Reporting journalist for Taupō and South Waikato based at the Waikato Herald.

– LDR is local body journalism co-funded by RNZ and NZ On Air.