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A 9.9% average rates rise is locked in for the Queenstown Lakes district after councillors unanimously approved the 2026-27 annual plan on Thursday.
However, a majority of councillors expressed unease at deviating from the council’s long-term depreciation funding policy to achieve the single-figure rise.
Councillor Samuel Belk said it was done in response to the ‘‘searing testimony’’ of ratepayers, particularly in Luggate and Hāwea, about high cumulative rates increases during a cost of living crisis.
He was ‘‘guilty as charged’’ as he had suggested trimming the funded depreciation rate to keep a lid on rates.
He still supported the move, but recognised it was ‘‘borrowing from the future and doesn’t recognise intergenerational equity’’.
‘‘It’s a blunt tool, but I think we should use it now and look forward to a much fairer rating system as we go forward.’’
Corporate services general manager Meaghan Miller said a ‘‘wholesale review’’ of the council’s approach to setting rates would begin next month with the goal of an ‘‘accessible, transparent rating model’’.
A report for councillors said Hāwea and Luggate residents were responsible for 73% of submissions on the plan.
‘‘Overall, feedback focused on affordability, cost of living pressures and the cumulative impact of rates increases.’’
The annual plan reduced the median rates increase for Luggate from 28.3% to 13.3%, and pared back Hāwea’s increase from 18.2% to 12.5%.
Councillors agreed last month to reduce the district-wide average rates increase from 11.8% to 9.9%, saving households about $60 each over the next year.
That was achieved by cutting capital expenditure on 10 projects and reducing the rate of funded depreciation to 49% instead of 52%.
The latter is contentious because two years ago, the council resolved to progressively increase funded depreciation from 34% to 67% over 10 years.
Funded depreciation is the money collected through rates to pay for the future replacement of assets such as roads and Three Waters infrastructure.
By deciding to collect less funded depreciation over the next 12 months, councillors are effectively relying on higher rates, borrowing or other funding sources in future years to replace its assets.
Cr Melissa White said that was ‘‘kicking the can and making it someone else’s problem’’.
Cr Matt Wong said getting rates under 10% might get ‘‘great headlines’’, but using funded depreciation to achieve it was ‘‘cheating the system’’.
Cr Gavin Bartlett said he understood cost of living pressures were affecting many ratepayers, but tinkering with funded depreciation to save households $60 a year was a ‘‘token gesture’’.
Cr Niki Gladding agreed it was ‘‘not good practice’’, but reasonable considering the fuel crisis and the transition next year to a Three Waters services company.
Overall, the plan ‘‘struck a decent balance’’, she said.
