Far North ratepayers have been spared an unprecedented 16.5 per cent rates rise for the upcoming financial year after the district council found $8.5 million in savings from its budget and asked for a special, one-off $5m dividend from its commercial arm.

Far North district councillors voted on Thursday to slash a proposed 16.5 per cent total rates increase to just 5.1 per cent for the next financial year. The increase was agreed during final deliberations on the 2024-27 Long-Term Plan (LTP).

Earlier this year, the council proposed the 16.5 per cent rise to help it recover from recent weather events that have cost tens of millions of dollars. It could have been even worse, with the council initially looking at a 33 per cent rise. It was one of many councils proposing double-digit rates rises. Far North District Council (FNDC) also proposed a 7.9 per cent rise for 2025-26 and 4.6 per cent for 2026-27.

But the proposed rise – the highest in Far North history – sparked a public backlash, with Russell Bird, president of Grey Power Far North, worried that elderly folk would have to sell their homes or give up essentials like food or visits to the grandchildren if it went ahead. Bird said that, with most on fixed incomes and unable to generate any extra income to meet the increase, and with prices rising for power, mortgage payments, food, petrol and most other expenses, the elderly would be hit particularly hard.

Former MP and ex-deputy Far North mayor also Dover Samuels warned that the lives of thousands of people would be affected by the increase.

He said there was no way ratepayers could bear such a rise.

Kahika/Mayor Moko Tepania said councillors and staff went through budgets line by line to find more than $8.5m in savings for the 2024-25 year, bringing the total rates increase down to 8.5 per cent. That figure was further reduced to 5.1 per cent after councillors agreed to request a one-off special dividend of $5m from the council’s commercial arm, Far North Holdings (FNH).

Tepania said the savings were made possible by pushing some spending in the capital works programme (building and engineering) out to future years. This would affect only capital projects that had not yet started, he said. Savings were also found in operations budgets (day-to-day running of the council). These were made across the organisation, from reducing consultancy fees to cutting catering budgets.

The three-year Long-Term Plan, dubbed a “catch-up LTP”, focused on repairing damage to roads and other infrastructure caused by a series of destructive weather events in 2022 and 2023. The Government allowed eight councils, including FNDC, to produce LTPs covering just three years instead of the usual 10 in recognition of the extra challenges faced in repairing the damage.

“Residents told us during LTP consultations that the proposed 16.5 per cent rates increase for our first year was far too high,” Tepania said.

“I know that, in this economic climate, no increase is welcome but I’m happy that the cost savings we have found today mean our total rates increase will be less than the rate of inflation.”

Regarding the $5m special dividend from FNH, Tepania said the council had created the council-controlled trading organisation to make money and to offset rates.

“I’m very excited to make this request. This will hugely alleviate the rates increase and burden for our ratepayers for the upcoming financial year. A dividend of that size is only possible because our commercial arm has proved it can make savvy investment decisions that benefit the local economy and ratepayers.”

However, he said the 5.1 per cent increase was indicative only.

“Every property is unique. Different rates are applied to rural and commercial properties and reflect access to specific services, such as water and wastewater.”

Increases to the total rates take over the three years of the LTP now stand at 5.1 per cent for 2024-25, 11.43 per cent for 2025-26 and 7.2 per cent for 2026-27. These figures will be confirmed when the council adopts the LTP and strikes rates for 2024-27 at its next meeting on June 26.

Property owners can find out exactly how much they will pay by entering their address into the online rating information database at https://www.fndc.govt.nz/services/Rates/Rating-Information-Database. This will calculate the proposed rates from June 14.

Mike Dinsdale is the editor of the Northland Age and also writes for the Northern Advocate. He has been a journalist in Northland for almost 35 years.