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Hamilton is looking at substantial cost increases


Praneeta Mahajan
Hamilton, November 21, 2023

The news of Hamilton growing by leaps and bounds has been a sign of positive growth and possibilities for the residents of the city.

However, the clouds of trouble are now prominently visible over the Hamilton skies, as the Hamilton City Council is facing substantial cost increases in the coming years to continue delivering its current services to the community.

The Council is currently exploring how much more it will cost them in 2024/25 and beyond to provide the same services it does now, and what the implications could be for ratepayers.

The impact of high inflation, interest rates and depreciation on the 2024-34 Long-Term Plan has been signalled by the Council for months, with significant rate increases needed in years to come to address the financial challenges.

Hamilton Mayor Paula Southgate said: “I am proud of what we have achieved through some challenging times.”

“However, the financial environment has significantly changed. We are paying more on all fronts – from concrete, steel, power, insurance, labour and more. These are the materials we need to maintain and renew pipes and roads across the city and keep our city in working order.”

Inflation pressures

The inflation pressures are already impacting Council’s budgets and the organisation is bracing for further cost escalation in its Long-Term Plan. The Council’s costs for contracted cleaning of its facilities are expected to rise by 13.2% next year. This is a combination of increased labour costs and the addition of new facilities to look after such as Te Kete Aronui Rototuna Library.

“My priorities are clear. we must deliver the services expected from our communities and look after our assets. But there are some things we simply cannot afford to do,” said Mayor Southgate.

Looking ahead to what the Council’s capital works programme will cost in the Long-Term Plan, independent forecasts are expecting concrete and quarrying expenses to increase by 12.5% and 10.7% respectively in this financial year.

On top of the inflation increases, interest and depreciation will cost the Council an additional $36 million in 2024/25 from what was in the previous Long-Term Plan.

“These increases show the scale of what councils across the country are facing and it is not unique to Hamilton or how we operate. Councils up and down the country face the same challenges. We are looking at just what it will take to keep running the city well. there is nothing new or gold-plated,” said Mayor Southgate.

Households under pressure

Many households around the city are struggling with a higher cost of living, interest rates and inflation, which has already changed how Hamiltonians budget and spend. A possible rate increase is the last thing they need, according to many homeowners who spoke to Indian Newslink on the matter.

Manjot Kaur, a teacher by profession, said, “A rate increase will make our budgets even harder to manage. As a two-income household, we are doing everything we can to get by, but any added costs make us worry about how to absorb that cost and make things work. There is no solution in sight for average families.”

Meanwhile, how the Council plans to tackle the city’s financial challenges will become clearer when Mayor Southgate and Chief Executive Lance Vervoort present the first cut of the draft 2024-34 Long-Term Plan budget later this month on November 28, 2023.

“Through the process, we will listen closely to the community to hear their views,” said Mayor Southgate.

Praneeta Mahajan is an Indian Newslink reporter based in Hamilton.

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