Hi Friend,

I want you to be the first to know about the dramatic news on our campaign to tackle out of control council rates.

Moments ago, Prime Minister Christopher Luxon, and Local Government Minister Simon Watts, announced Cabinet's decisions on how they will cap council rates.

First the good news: The Government is going to spend the next three months consulting on a rates cap of between two and four percent per year.

This is a real win! While it accounts for inflation (and various estimates of GDP growth) it doesn't make the rates cap based on a proprietary or secret/black-box calculation of 'local government inflation' which was what LGNZ have been lobbying for. What we'd feared was some sort of snake-eating-its-tail measure, where councils' inefficiency could drive up what they could charge. 

They've also separated out water infrastructure - as those charges are about to be separated out and are subject to economic regulation. So LGNZ's argument that 'we need to invest in water' is now moot.

But that's where the good news ends.

Despite indicating the legislation will be passed before next year's election, Minister Watts says the actual caps won't be in place until 1 July 2029.

That means the cap won't apply until you get your 2029/2030 rates bill!

Until then, councils will only need to "consider" and "integrate" the 1 July 2029 rates capping into their long term planning.

Friend, this is a massive backdown. It means councils are incentivised to HIKE RATES NOW - in advance of the coming cap. 🤦

Watts he thinking?

Cumulatively, over the last three years, the average rates bill is up an incredible 34.5 percent.

Mark my words - unless we bring the start date forward, rates will be going up 50 percent (or more) over the next few years. Will you step up to support our campaign to stop exactly that?

Capping rates is not enough - we need to Cap Rates NOW!

Friend, our interpretation of today's announcement is that it's the MMP compromise resulting from the coalition partners who have not publicly supported the Prime Minister and Minister Watts in this National Party-led policy. We need to keep the pressure on so the Government brings the policy forward so it applies as soon as the law is passed next year.

But to do that, we need one last push.

The decision to delay until 2029 is a massive win for Local Government New Zealand and it's (ratepayer funded!!) effort to derail this policy.

With the decision to delay the actual cap until 2029, LGNZ will have every incentive to use ratepayer money to oppose the Government - including in next year's election.

That's why we need to redouble our efforts, mobilise ratepayers, and force the Government to Cap Rates Now – not in 2029.

Can we count on you, Friend?

Jordan Williams Executive Director New Zealand Taxpayers’ Union