Christchurch mayor says keeping rate rise to promised 4% will be 'very challenging'

Nicole Mathewson Reporter from The Press

From reporter Steven Walton:

Christchurch mayor Phil Mauger says achieving an election promise of keeping rates low will be “very challenging” in a difficult global environment of high inflation and rising interest rates.

His comments come as councillors begin work on next year’s Christchurch City Council budget.

Councillors have been briefed about it twice behind closed doors, and it is expected that a public briefing will be held before the end of the year.

Mauger, who was elected last month, campaigned on keeping rates affordable. He has indicated that he wanted annual rises set between 3 and 4%.

Asked last week if that was still achievable, Mauger joked, “Haven’t you got any other questions you can ask me”, before adding: “It is going to be challenging, that’s going to be very challenging because of what’s happening globally.”


The council was under “lots of pressure” from inflation and interest rates, Mauger said.

Annual inflation hit 7.2% back last month while interest rates are expected to rise with the Reserve Bank raising the official cash rate by a record amount last week.

The council has already faced cost increases this year on three large projects: the Te Kaha stadium (an extra $150 million), the Court Theatre (an extra $16m) and the Hornby pool, library and service centre (the overrun amount has not been released publicly).


Mauger said at a public meeting last week the council had to cut its cloth because it was “heading into a bit of strife”.

Earlier this month, councillors were given an “indicative range” for next year’s rate rises – understood to be between 12 and 14% – but this is simply a starting point that will change as it does not account for any changes to deal with inflation and rising interest rates.

“This was in essence a risk check for the council to show the potential impact of these external factors on our operations,” said Leah Scales, the council’s resources general manager and chief financial officer.

Clearer indications of potential rate increases would be released during upcoming public briefings and consultation, she said.


Mauger said he expected work on a “line-by-line” review of the council’s budget to start before Christmas.

“In the past we might’ve done 10 things for a million dollars, now we’re going to do seven and we’ve got to decide very carefully which three dip out.”

Those decisions would involve staff advice and councillors voting, he said.


“I can’t give you any examples because I haven’t seen the line-by-line yet, but there will be things on [the budget] and you go ‘is that totally necessary at the moment?'”


Mauger said things would not get to a point where, for examples, libraries would be shut. He also said: “If it’s an absolutely knackered sewer pipe, you’ve got to fix it.”

Instead, he wanted to cut out the nice-to-haves and suggested a planned upgrade for Gloucester St as an example.

“Say we go into a recession, we can still drive down that road now. They’re the sort of things that you’ve got to say, ‘let’s be a bit careful’,” he said.


At a council meeting last week, Mauger also pushed to reconsider the timing of a $6.2m upgrade to Addington Brook – a stream that runs through South Hagley Park.

Another project on his radar was a $33m makeover to roads around the stadium, but he said last week he was now looking at it differently.

Some work was underground infrastructure and could not be delayed, while the Government was also likely to contribute $11m, he said.

“It’s still a lot of money, but it’s slightly more digestable,” he said.