After receiving his rates bill, a Whakatāne commercial building owner is wondering why anyone would invest their money in the town.
Retired businessman Clive Wickham has purchased two commercial properties in Whakatāne since returning to the area five years ago.
The rates on one of these, at 106 Commerce St, with a rateable value of $2.62 million, have jumped by 25.5%, from $14,858 a year to $18,652.
“I’ve got to ask the question: Why would you invest in Whakatāne when you get slammed with rates like that? I have properties in Auckland, Hamilton and Rotorua, and they’ve not gone up by anywhere near that —25.5% just blows everything else out of the water.”
Rates on his other commercial property at 15 George St have gone up by 21.1%. This lower increase reflected the building’s body corporate covering waste collection costs.
“The component for the rubbish went up by about 50%, on my other property,” Wickham said.
He said with rates rises like this, he wouldn’t be investing in properties in a country town in future.
“I would buy in the bigger centres, instead,” he said.
Whakatāne District Council’s Long-term Plan 2024-2034 included average overall rates rises of 15% this year, 12.7% in year two and 9.5% in year three. However, rates rises on individual properties varied.
Wickham said he also owned three residential properties in Whakatāne which had seen rates rises of about 17%.
“In one year? What are they thinking? It’s scary because what’s to stop them doing it again and again. There certainly must be a cost-plus mentality. Talk about a kick in the guts.”
He said he would be taking the hit on the rates increase himself, rather than passing it on to his tenants as his agreement was for annual CPI increases.
Wickham said he grew up on a rural property in the Matahina area and went to school in Whakatāne district but had been away more than 50 years, during which time he owned a variety of businesses.
He felt the council needed to review its spending, and praised Auckland Mayor Wayne Brown, saying he had done, “a very admirable job” reducing rates.
“We’ve got an election next year. I’m all for investment. I appreciate they’ve got to invest in the town, but bureaucrats are very good at spending other people’s money.
“At some stage the council have got to look at their mechanisms and their whole cost structure and staff structure, because something’s not working there.”
Synergy Accountants’ Paul Nicolson, one of Wickham’s commercial tenants, said he was concerned about the impact on small business tenants in a rural service town which is struggling at the moment.
“When you look at the number of boutiques and cafes that have closed or gone into receivership, and now they will be having to pay an extra 20 to 25% in rates.
“We’ve seen the number of retail businesses in town that have been forced to close through the economic environment. If businesses keep getting hit by 20% rates rises that is only going to get worse.”
Former Whakatāne district councillor Gerard van Beek also owns some commercial properties in Whakatāne, which he says have seen rates rises of 24%.
I do feel that there is a degree of overspend [at the council] because the level of debt is increasing exponentially and that is totally unsustainable.
Not all costs within council control
He said overstaffing, due to central government requirements; high costs of materials; and lack of investment in technology by the council were at fault.
“This council has been very slow to invest in technology. There are a lot of legacy systems that cannot be got rid of because it’s too expensive,” he said.
As a rural property owner, he felt regional council rates were even more of a concern.
“The regional council has had far more significant rate rises, which seems to have gone unnoticed.”
Whakatāne District Council is one of many councils throughout New Zealand facing large rates increases this year. Inflation, increased costs of compliance, insurance and costs of materials have all been given as reasons for the increases.
When voting on the councils’ long-term plan last month, Whakatāne Mayor Victor Luca and councillors Andrew Iles and Gavin Dennis said they were against the high rates rises.
The mayor said the 15%t average rates rise in Whakatāne was about the national average and there would always be higher and lower percentages around that rate, Luca said.
“I consistently advocated for the lowest rates I could get.
“I know the ratepayers aren’t an endless pot of money.”
Whakatāne councillor Toni Boynton said there is an anti-council sentiment building within the community.
“We understand completely that there are cost pressures on everybody. It’s not something we take lightly at all.
“My concern is that council needs to be better at explaining what a council actually does, how it works, how not only decisions are made but what the funding model is for local government.”
The local government funding model is “broken”, she said.
“Those rules mean that we are very limited in how we receive income.
“People don’t want to hear the big long story, all they see is what is impacting them right now.”
Whakatāne District Council acting chief executive David Bewley alos pointed out the council adopted its Long Term Plan 2024-34 with an average rates increase of 15%.
“You will note in an article published by 1News that this reflects the average rates increase for New Zealand councils in the current planning cycle,” Bewley said.
LDR is local body journalism co-funded by RNZ and NZ On Air
