Local Government New Zealand (LGNZ) is calling for "significant change" to curb dramatic rate rises for many Kiwis around the country.
Vice president of LGNZ Campbell Barry said the challenges facing local Governments are something he's never seen before in his 13-year career.
It comes as ratepayers are being warned by mayors around the country that pain is coming with massive double-digit rate rises tipped for many areas. The warnings come as councils discuss long-term plans, saying the only alternative to dramatic rate rises would be significant cuts to essential services.
Dramatic rate rises are happening all around the country. Hamilton is proposing a 25.5 percent rate hike, which would equate to $722 per year on average. In Lower Hutt, a 16.5 percent rise is being touted for the next financial year and in Auckland a 13.75 percent increase is being proposed for 2024.
Barry, who is also the mayor of Lower Hutt, told AM on Wednesday morning that councils all around the country are facing massive challenges.
"The fixed costs, the uncontrollable costs that many households and businesses are facing, insurance, interest rates and the likes are the exact same type of costs councils are having to grapple with," he told AM host Michael O'Keeffe.
"Alongside that, we also have the cost of infrastructure continuing to go up and the demand. Water infrastructure as well and the uncertainty around what's going to happen there. There is just a whole heap of challenges councils are having to navigate. I've been involved in local government for 13 years and I haven't seen anything like this."
He believes significant change is needed as the current proposed rate hikes are not financially sustainable for ratepayers.
But he warns the change that is needed will take some time.
"We're going to have to grapple with what that looks like. I would say we're talking a five-to-ten-year period of change," he told AM.
"There's little we can do around some of the rate increases that councils are going to be facing this year within the current structure, but the challenge I know that councils and mayors and councillors are grappling with is not kicking the can down the road, particularly when it comes to infrastructure, which is driving a lot of these increases."
Local Government Minister Simeon Brown has been embarking on a series of meetings with mayors about city and regional deals.
Barry said those meetings have been positive so far.
"I think it's still early days, but I think the conversation is certainly positive that they want to work with us around what sort of alternative funding options there are," he said.
"How can we work together to grow the pie and then share the growth and also just think about different ways of how we deliver, particularly infrastructure, because that is the thing that is killing local government and also a challenge for central government."
Watch the interview above for more.
