Facing the Hard Stuff: Why We Raised Rates to Get South Waikato Back on Track

When I first stepped into the Mayor’s office, the numbers didn’t lie. We were in a tough spot, the Council was borrowing just to cover everyday costs. That’s like using a credit card to pay for your weekly groceries. It’s not how you run a household, and it’s not how we should run a district.

We had an operating deficit of $10 million from previous years, and we had to make a call: keep borrowing and hope for the best, or front up and fix the problem. I chose to act.

Since then, we’ve stopped that kind of borrowing, and we’ve steadily reduced the deficit. We’re now sitting at $6.4 million and are on track to bring that down to $2 million by the end of this year.

Why We Had to Change Course

The truth is, for too long the focus was on keeping rates as low as possible, and I get why. No one wants to pay more. But that approach came with serious long-term costs.

In the past, rates were held back by cutting back on maintenance, underfunding depreciation, and using debt to cover gaps. That might have felt like a short-term win, but the result was that our facilities and infrastructure began to fall behind. Pipes, roads, buildings, they weren’t being looked after to the standard they needed to be. It was a bit like patching a leaking roof instead of fixing it properly , eventually, it catches up with you.

Even in 2020–21, during Covid-19, Council applied a 0% rates increase to ease the financial pressure on ratepayers. It was a well-meaning decision, but to make it work, projects were delayed, staff salaries were frozen, depreciation was underfunded, and Council ran an operational deficit covered by borrowing. That approach kicked the can down the road, and by the time I stepped in, we had to start undoing the damage.

Making Rates Work Smarter

The 2023 rates increase wasn’t about spending more, it was about getting back on track. It helped us stop borrowing for daily operations and begin building a more stable foundation for the future.

In 2024, the rates increase was held at 8.9%, one of the lowest in the country, and our long-term plan now keeps future increases in line with inflation.

We’ve also set efficiency targets to make sure we’re running smarter, not just spending more. That means finding annual savings across the organisation without cutting services, and reviewing how we deliver those services to make sure we’re being practical and sustainable.

A Fairer, More Future-Focused Approach

We’ve also changed how some services are funded. Instead of every ratepayer covering everything equally, we’ve moved to a “beneficiary pays” approach where it’s fair, meaning those who use the service cover more of the cost. This model was supported by the community and is now reflected in our updated fees and charges for 2024–2025. It’s about fairness, financial responsibility, and setting things up properly for the next generation.

“For South Waikato to thrive, to be a place where people want to live, work and raise their whānau, we have to think differently. This Long Term Plan is about setting the foundation for a stronger, more resilient future. We’ve made bold decisions, found cost savings, and kept services running, because we can’t afford to stand still.”

I know rates are a sensitive topic. But the hard truth is: if we didn’t act, future generations would’ve paid the price, literally. That’s not something I was willing to let happen on my watch.

As always, if you have questions or want to kōrero more about this, my door’s open.

-Gary

Authorised by Gary Petley, 027 483 6809.