Wellington property owners are facing a 4.8 per cent rates hike as the city council looks to offset lost revenue caused by the coronavirus pandemic.
The council is proposing the increase as a compromise between a previously-mooted 9.2 per cent increase and a total rates freeze for the 2020-21 financial year.
Not much of a compromise. A 5% rates increase would be indefensible even when the economy is booming. Doing so in the middle of a recession is economic sabotage. You do not increase taxes during a recession.
A third option of freezing rates entirely was also seen as unachievable, with an additional $16m required from borrowing or budget savings, as well as a drop in service levels.
Debt-funding the additional $16m was not deemed financially prudent, and would pass a significant burden onto future ratepayers, the paper said.
When the Council is spending $100,000 a week on trucking wastewater, further savings seem very possible.
And even if one does have to increase borrowing and hence the burden on future ratepayers, it is worth noting future ratepayers won’t be in the middle of a recession where household and business incomes are plummeting.