Bagrie on WCC and rates

Cameron Bagrie writes:

Wellington City Council needs to get with the programme.

The increase in rates should be zero. Not 4.9 per cent, or 2.15 per cent, which whilst down from the previously proposed 9.2 per cent, is still too high.

You cannot say rates need to rise because of funding shortfalls and then pledge support to Wellington Airport. Sure, Wellington Airport might be considered a strategic investment for the region, but you are mixing your drinks saying you are short of funds and then putting money on the table for the airport. I support the airport, but not lifting rates to assist with it. Sell another asset if the airport investment is the priority.

And we still don’t know how much of our money has gone into the airport.

Councils are facing less income from non-rate sources as an economic recession bites, just like businesses. Wellington Council debt has been rising fast.

It is missing the point.

They have balance sheet capability. As noted in Wellington City Councils 2018/19 annual report “our financial position remains healthy”.

Wellington City Council have assets close to $8 billion. They have a property investment portfolio of around $250 million. Property, plant and equipment of more than $7 billion. Councils will always have some cash on hand for liquidity and rainy day purposes; that was more than $100 million in the last financial year.

Borrowing is less than 10 per cent of assets.

Increasing taxes such as rates in a recession makes the recession deeper. Borrowing is the sensible thing to do, rather than increasing rates.

We are not talking about cutting rates, just a zero increase. Many businesses are going to be cutting prices to help drive a recovery.

Total sales and income across the economy for the business sector is around $700 billion per year. Do the maths on what it costs the economy and businesses if major parts are shut down for one month, two, and possibly more.

Quite simply they can’t afford a rates incease.