Last Friday, the Beacon published a letter to the editor from Dave Stewart containing comments on the 2025 rise in council rates.

Yes, 15 councils have rate increases even higher than the Whakatāne District Council but conveniently not mentioned were the 62 other territorial authorities, district and regional councils that had rate increases well below those of our council.

Those 62 councils had an average rate rise of 7.96 percent, well below Whakatāne’s 11.7 percent.

There is no common (central Government?) theme with regard to rate rises. Those 62 other councils are proving that.

Every reader who wants to check can find the data here: www.taxpayers.org.nz/rates_dashboard_2025.

This means that determining a rate rise for a certain council is a local theme.

Other data from Stats NZ reveals that the median income, after tax, growth of a New Zealand household was 5.30 percent in 2024.

The median income means that of the 2 million-plus households in New Zealand, one half earns less, and the other half earns more than that income. That income was $86,257 for 2024 and grew 5.30 percent from 2023.

If you look at the Taxpayers Union Table again, you will find that only nine councils were able to increase their rates lower than the median income growth of 5.30 percent.

So, only nine councils were able NOT to put more pressure on the cost of living; 68 councils did put more pressure on the cost of living.

If I expand the data to the past three years (2022-2024), all councils put more pressure on the cost of living. (Average compounded rate increase for all councils was 34.52 percent; median income growth for those years was only 15.16 percent and the compounded inflation was only 16.62 percent). So, how come?

A little history lesson I found in a recent article from RNZ.

The following statement caught my eye: “For example, despite rates appearing to increase more towards 2007, the Infrastructure Commission has identified the period from 1995 to 2008 as a time when rates were consistently below their post-World War II average as a share of gross domestic product, and this coincided with a deterioration of the stock of transport, water and waste assets.” (You can find this statement here:www.rnz.co.nz/news/political/567339/local-democracy-under-threat-officials-warn-against-removing-council-four-wellbeings)

The above means that a two-term National (Bolger and Shipley) government and a three-term Labour (Clark) government loosened the rules of investment and depreciation, so a significant infrastructure deficit, national and local, could develop.

A deficit we now must cater for and is dominating the debate for the coming years between more debt or even higher rate increases.

Zooming in on our local situation what data is available about the economic activity within the Whakatāne district?

The Infometrics website, a leading NZ Economic consultancy, shows the 2024 household income growth (from all sources; not adjusted for inflation) was only 0.9 percent for our district and the last three years it was 13.05 percent compounded.

These are numbers well below the national figures, 5.30 and 15.16, percent as mentioned above, and I believe every (retail) business in Whakatāne can confirm that without looking at the Infometrics website.

I strongly believe the compounded rate increases over the last three years of 40.66 percent has sucked too much life out of our local economy by reducing discretionary spending.

The New Worlds and Bunnings are not affected, but your CBD businesses are. The low economic growth performance numbers underscore this assertion.  

This issue will be compounded into the future as we deal with historical decisions made about infrastructure investment and funding.

And if you were hoping that the debt would be increasing less, then I have not-so-favourable data for you ready.

Over the past five years, the council debt blew out from $72 million to $154.4 million, up 114 percent, and our annual debt service costs increased from $2.674 million to $7.798 million, a 192 percent increase.

And to remind you, debt servicing is unproductive money.

Pictured above is a little screenshot from the latest Annual Report to illustrate that effect, 13.48 percent of total rates income went into servicing debt in 2024:

We had the bad of both worlds: Increasing (40.66 percent) rates over the last three years and despite that a debt blow out of 114 percent over the past five years. If we all see that as an investment in our community then ratepayers should ask themselves, was it worth it?

The economic effects of those investments are clearly below the national average as I have shown. They will get an opportunity to answer that question soon.

But these would be my suggestions:

■ Review the Riverside Holiday Park. It is not a core task of the council and according to the LTP 2024-2034 draft financial consultation document, it is a loss-making enterprise of about $500,000, which needs to be funded. Extra borrowing is needed to make up for the loss. Sell it or increase the usage charges so it isn’t making a loss.

■ Review the council property portfolio. Multiple properties were acquired to support the now stalled town revitalisation and riverfront plan. Are they still required? If not, sell them.

■ Here is a very recent example from the agenda of infrastructure planning meeting last on July 24. Below is a screen shot from the statement of intent for Whakatāne Airport for the period 2024-2027.

A deficit of $2.6 million is budgeted of which 50 percent will be likely (council’s own words) funded by the Ministry of Transport.

The remaining $1.3 million needs to be funded by the council. The question is whether owning an airport is a core task of this district.

This was my research. Councils blowing out debt is a local theme.