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Local Government Minister Simon Watts has criticised Ashburton's proposed 10 per cent rates cap as "well above" government's expected direction.
He is calling on councils to bring rates increases closer to the two — four per cent target range now.
Ashburton District Council is considering a sliding scale of self-imposed rates caps, starting at 10 per cent in 2027/28 before dropping to seven per cent and then four per cent by 2029/30, when government’s proposed rates cap is due to take effect.
Watts said the transition approach was not inconsistent with his expectations, with each council responsible for determining its own pathway.
However, he said Ashburton needed to continue looking for ways to reduce future rates increases.
“The fact Ashburton is considering options to moderate future rates increases is a positive step, he said.
“However, a 10 per cent increase remains well above the direction I expect councils to be moving in.
“I would expect councils to continue looking for opportunities to prioritise spending, focus on core services, and bring rates increases closer to the target range over time.”
Watts stopped short of telling Ashburton what it should cut or defer to achieve lower rates increases.
“It is not for me to direct councils on individual spending decisions. Those decisions are best made by locally-elected representatives who understand their communities' priorities.”
Watts said councils should assess whether lower-priority spending could be delayed or delivered more efficiently, while maintaining critical infrastructure and core services.
The Government plans to cap rates increases within the two–four per cent range, which excludes water charges, from July 2029 but long-term plans prepared before then need to consider the target range.
Watts said councils needed to make “credible progress” towards the target while maintaining essential services and infrastructure.
“I expect councils to be disciplined about rates now, not just when the cap takes effect.”
He also confirmed officials had warned the Government that rates capping could lead councils to increase some fees or reduce service levels.
His comments come as Ashburton councillors develop the council’s 2027-37 long-term plan, with the sliding scale currently being used for budget modelling rather than setting actual rates increases.
Ashburton Mayor Liz McMillan said the council wasn't trying to cash in before the four per cent cap is introduced and the proposed self-imposed 10 per cent cap, excluding water charges was “a limit and definitely not the starting point, or target”.
The last three years Ashburton has had rises of 9.9 per cent, 7.3 per cent and 9.8 per cent (all including water).
