Households in Napier are facing much higher rates bills later this year. Photo: Ramunas/123RF
Napier business associations and community services are concerned at the prospect of a nearly 12 percent rates hike.
Residents will be paying 11.7 percent more in rates in the 2023/2024 year, after the council voted unanimously in favour of the increase on Thursday.
It was going to be as high as 16 percent, but the council will borrow $3.3 million to lower the cost burden on residents.
However, community and business groups said it will still hit hard, on the tail of Covid-19, Cyclone Gabrielle, and amid the rising cost of living.
The Napier Family Centre is a not-for-profit which offers financial mentorship and advocacy.
Chief executive Kerry Henderson said lately, it was not just low-wage earners who were struggling.
"We are seeing more middle-range wage earners coming through our doors needing help to get on the right financial track, because they're just not making ends meet."
She said whānau were already hurting from paying more for the likes of petrol, mortgages and food.
Renters would also notice the increase, as landlords put rent up to meet their higher costs.
"We're going to have households having to try to find a few extra hundred dollars that just doesn't exist at the moment," Henderson said.
Rates rebates, offered to families whose homes were damaged by the cyclone, were due to stop at the end of May.
Henderson said keeping people in healthy homes was paramount for social and physical wellbeing.
"We are really in [between] a rock and a hard place," she said.
"What I'm hoping to see as a flow-on from this is the current rate rebates, and how are they going to be expanded or increased for whānau that are really struggling?"
The rates increase will be broken into two - nine percent for business as usual, and two percent for cyclone recovery.
As the council has not put the plan out for consultation, the vote at its meeting on Thursday morning confirmed the increase for the 2023/24 year.
Rates too low for years - mayor
Kirsten Wise. Photo: RNZ / Tom Kitchin
Mayor Kirsten Wise said it was the result of decades of underfunding.
"For approximately the past 20 years, we've had the lowest average annual rates increase for any similar sized council in the country."
She said they were in the position they found themselves in today because of many years of rates being lower than they should have been.
Council officers told the meeting the two percent for cyclone recovery would equal $1.5 million dollars.
Wise said the council would be doing a deep dive review of its services to find ways to cut costs.
"I don't think it's a matter of trying to find savings, we have to find savings."
This was likely to come from a reduction in council services; the alternative, she said, was for rates to continue to rise.
General manager of Napier City Business Inc Pip Thompson said the increase would hit small businesses hard.
The city had been quiet since the cyclone, as people saved money by cutting back on non-essential spending.
"The increase in costs everywhere is having a huge effect on business, and this is just ... not the icing on the cake, but just another addition."
