Council rates rising almost 3 times faster than inflation

Rates charged by local councils in New Zealand rose 8.4% in the March quarter from the same period a year ago, figures released by Statistics New Zealand (Stats NZ) show. This is almost three times the 3% increase in the consumer price index over the same period. Council income from regulatory expenses and taxes fell by 4.9% in the same period, due to the decline in building consents over the last year. Local authorities had a combined operating surplus of NZ$78.5 million in the quarter, down from NZ$90.8 million in the first quarter of 2008. It was well down from the average of NZ$118.5 million for the March quarters of 2003, 2004 and 2005, but slightly above surpluses in 2006 and 2007. Seasonal adjustment showed councils' operating surplus fell 16.1% from December to NZ$42.8 million. The amount of rates charged rose to NZ$980.5 million in the March quarter from NZ$904.6 million a year before. The 8.4% annual rate of growth was up from 5.9% annual growth in the March quarter of 2008. It also compared to 8.1% in the December quarter of 2008, 9.1% in September and 9% in June. Regulatory income (which includes income from building consents) and petrol tax revenue fell 4.9% to NZ$94.1 million in March from a year ago. This followed an annual decline of 1.6% in December, and was down from 7.3% annual growth in the March 2008 quarter.

The amount of grants, subsidies and levies given to local councils from central government rose 19.2% from a year ago to NZ$253.3 million. This was down from annual growth of 28.8% in December and 25.7% in September, but still up from 10.9% in March 2008. Councils' investment income fell 1.3% from a year ago. This compared to an average annual fall of 11.9% in the December, September and June quarters and 6.9% growth in March 2008. The annual growth in employee costs fell to 6.8% in the March quarter, its slowest rate of growth since the June quarter in 2006.