Over Rated

I’ve seen a number of comments lately that put the blame on Wellington ratepayers for the woeful state of Wellington City Council’s finances. This one, for example:

Decades of avoiding meaningful rates increases has led us to the current situation…

It didn’t quite ring true, so I looked at the numbers. Admittedly I haven’t gone back decades, just 15 years, but $2,000 earning interest at the rate of inflation from 2010 would be worth $2,908 today. If your rates bill was $2,000 in 2010, today it would be $4,750.

Here are the numbers…

Year	Rates Rise	Inflation Rate	Difference	Rates Source
2010	2.85%	2.30%	-0.55%	link
2011	3.74%	4.03%	0.29%	link
2012	3.60%	1.06%	-2.54%	link
2013	2.50%	1.13%	-1.37%	link
2014	2.49%	1.23%	-1.26%	link
2015	3.80%	0.29%	-3.51%	link
2016	3.60%	0.65%	-2.95%	link
2017	3.30%	1.85%	-1.45%	link
2018	3.80%	1.60%	-2.20%	link
2019	3.90%	1.62%	-2.28%	link
2020	5.10%	1.72%	-3.38%	link
2021	13.50%	3.94%	-9.56%	link
2022	8.00%	7.17%	-0.83%	link
2023	12.30%	5.60%	-6.70%	link
2024	18.50%	4.00%*	-14.50%	link

_{* End of March quarter 2024. The annual inflation figures come from here.}

So in only one year in the last 15 have WCC rates been less than the annual inflation rate, and then by just 0.29%. Contrast that with this year’s double-digit difference.

I’ve included links to sources of the rates rises because some of the comments and promises are… illuminating. The 2013 rates increase was for a “transformational… action focused plan”. In 2016 the council was planning to “rapidly increase” affordable housing and start work on the strengthening the Town Hall – original budget $43m, now more than $300m. Or how about this assurance from the Long-term Plan 2018-28:

We’ve committed to an average rates increase of 3.8 percent for 2018/19 after growth, and an average of 4.0 percent over the 10 years of the plan.

Seven years into that plan and rates have increased by 65% instead of the projected 28%. And we’ve still got three years to go.

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