National urges Labour to take stance on rates cap law change

Author: Michael Sergel,
Publish Date: Thu, 16 Jul 2026, 5:00am

National is calling on Labour to take a clear stance on rates caps, with the Government intending to introduce legislation before the election.

Labour Leader Chris Hipkins has told Newstalk ZB the party is yet to decide on a position on the issue and is still awaiting more detail about what is being proposed.

He said while the policy was “good retail politics” and “no one wants to pay higher rates”, councils will need to be given ways to make a rates cap work.

“We haven’t made a final call on that because one of the things is you’ve got to figure out how councils are actually going to pay for what they need to do if you have a rate cap in place and that’s one of the big problems.”

Local Government Minister and National Party local government spokesperson Simon Watts said Labour had previously indicated it would vote against introducing a cap.

“If Labour is serious about addressing rates increases, then they would support our Government’s rates cap. Labour doesn’t even know what their own policy is.

“National’s plan is clear. We’re progressing rates cap legislation to help relieve pressure on household budgets by ensuring councils focus on delivering core services efficiently and affordably.”

One of the most outspoken critics of the rates cap, Auckland Mayor Wayne Brown – who has just overseen a 7.9% rates rise – has told Newstalk ZB the Government should stop telling the council what to do.

“We have too much advice coming out of Wellington, which is smaller than Howick. This is not a corner dairy. Only Foodstuffs and Fonterra are bigger in New Zealand than Auckland Council.”

Brown previously held up a can of baked beans at a council meeting, which he said represented how much ratepayers would save each month under the change.

Dunedin mayor Sophie Barker has also used food analogies, telling Newstalk ZB councils are “not buying pies at the supermarket” while Tauranga mayor Mahé Drysdale claimed the rates cap would prevent his council from covering the cost of “even the core infrastructure”.

Credit rating agency S&P said rates caps could lead to reduced library and pool hours and some councils may take on extra debt.

Auckland Council has previously suggested the Government consider a rates “target” – similar to the Reserve Bank’s medium-term inflation target – with consequences for councils that are outside that range without due cause.

Watts has been considering feedback from councils on a plan to cap rates rise and said there was a clear case for change after significant rates rises in recent years.

“Rates rises are increasing costs for Kiwis and putting pressure on household budgets. This is exactly why our government is progressing a rates cap,” he said.

“Ratepayers deserve councils that live within their means and deliver better outcomes for their communities.”

Michael Sergel is Newstalk ZB’s business reporter. He’s been covering business, politics, local government and consumer affairs for more than a decade.