Letter: Rates increase

19:38, Jan 23 2013

I am fast coming to the belief that the Invercargill City Council keeps increasing our rates not because of need, but simply because it can.

As things are tough for those on fixed and low incomes and predicted to get tougher, I would like to suggest it is time for a change of mindset in the approach taken to rates setting by our councillors and those waiting in the wings for October.

Greater use of borrowings to fund capital works takes the pressure off current ratepayers and shares the pain of funding the infrastructure with future generations and newcomers to the city.

The ratio of debt to total assets in 2010-11 was 5.41 per cent and in 2011-12 it fell to 4.85 per cent, despite the council having a 15 per cent cap on borrowing. Plenty of room for movement there.

If the $6.37 million of incomplete projects planned and funded from 2011-12 rates had come from loans, it would not have affected our rates. As it is, ratepayers have lost the use of that money for a year.

Infrastructure, in 2011-12 so often quoted as the cause for increases, took $18.81m of our rates and, while I have no quarrel with the work done, more of it should be funded from loans.


Another area due for scrutiny is general reserves - "may be used for purposes other than specified" - should be attracting the attention of any elected representatives sympathetic to easing the rates burden.

This $7.7m (February 21, 2012), of ratepayers money stashed away to cushion the underspending and overspending of budgets is money not circulating in the local economy, while adding to the difficulties of the less well off.

How often do we hear that phrase, "It is not coming out of rates but reserves"?

A rates reduction, not a zero increase, is what we should be demanding of our councillors.

All it needs is a bit of the can-do spirit from the sitting councillors.