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There is little doubt many businesses and organisations are enjoying a sustained period of growth on the back of a buoyant economy fuelled by the demands of the South’s growing population.
House prices are soaring, subdivisions are sprouting and even mean earnings are climbing as demand for skills and products grows.
Demand for people and productivity is most acute in areas that will further fuel the economy, such as construction, transport and manufacturing. It can also be found in our councils.
The Dunedin City Council has developed a $321 million draft budget for the new financial year. If adopted, its staff of 974 might grow past 1000 by the end of the new financial year.
The proposed staffing budget will be $4.8 million heavier than previously forecast. It will account for another 27.1 full time equivalent positions, and for pay increases to existing staff.
All up, the council looks set to spend $69.8 million on staff — an amount in part funded by a proposed 6.5% increase to rates which will amass $10.2 million more than previous budgets forecast.
Such totals are significant but, when asked about the significance of employing 1000 people, Mayor Aaron Hawkins carefully explained the council had a lot of work to do — infrastructure services and consents processing loom large — and it needed staff to do the work. ‘‘It’s a number,’’ he said.
Indeed it is, and many letter-writing ratepayers have already put that number in context with the numbers that affect their willingness to stump up more in rates.
Property values are one such group of numbers. The average residential property value at the start of the year was about $530,000, 18% more than in 2018. Such a property may be liable for more than $2700 in rates next year, about $200 more than last year.
Properties valued at $600,000 or less may have similar increases.
Another set of numbers will help ratepayers consider how they might pay their share. According to Infometrics, the mean earnings for someone working in Dunedin was $56,800 in 2019, 3.4% more than in 2018. Mean household income was a shade over $84,000, or 4.8% better than last year.
Both best the rate of inflation, which was up to 1.9% and ought to hover around 2% for the rest of the year. The proposed 6.5% rates increase looms larger than inflation, the increase in earnings, stagnant savings rates and the level of superannuation.
Former mayor Dave Cull once described property rates as insufficient on their own as a means by which to fund council activities. The level to which councils relied upon them was excessive and not sustainable, especially when wage growth was low and living costs rose.
Some of the new jobs, such as building consent processing, will generate revenue while others are needed to ensure services are maintained in a growth environment, especially in core infrastructure.
Fair enough. There is little value in only part-funding a council that does not have the people or the resources to effectively manage a growing city.
Collectively, councils are grappling with the need to renew ageing infrastructure while trying to meet increasing demands on, and regulation of, core services.
It is little wonder, then, that Infometrics recently identified public administration as among the key sectors contributing to job growth in Dunedin last year.
That growth makes sense when its benefits can be seen. As they consider their council rates, ratepayers will want the proposed spend to ensure the council continues to provide the tools and the environment in which the city can plan, and provide for, its future.