How much will the 10-year Plan cost?

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Consultation has concluded

Alongside our four big challenges, we must be realistic about what we are able to pay for and when.

Pressures on our budget means the Council has needed to make some extremely hard decisions about what is in and out of the budget. This is to ensure we do not spend more than we can afford, so that future generations are not adversely impacted and that we have the ability to respond to future events, opportunities and pressures.

Where does the money come from?

The money for operating expenses comes mainly from rates, fees, and charges from those using the services, revenue from investment income e.g. ground lease income and any Wellington International Airport dividend. Debt funds the majority of our capital projects - our development projects and renewing and upgrading our assets and infrastructure..

Why is there pressure on the budget?

Pressure on the budget mainly comes from community demand and, meeting government regulations.

New Assets


Existing Assets


Debt repayments

  • The proposed plan includes significant investment in new assets, which leads to increased costs.
  • Depreciation is the amount collected through rates each year to cover the eventual cost of replacing or renewing a share of our assets.
  • Depreciation is forecasted to double in ten years.
  • New assets are initially funded by debt which means there is also an increase in our interest costs.

  • There is a lot more investment in our existing assets, including renewing ones that have come to an end of their useful life.
  • The 10-year Plan includes the strengthening of assets such as the Town Hall and the Central Library and includes improving our three waters infrastructure.
  • This also increases costs for depreciation and interest

The Council has borrowed money to fund lost revenue (about $38m) as a result of:

  • COVID-19 and people not using Council facilities and services
  • the temporary central city libraries.
  • lost dividend for Wellington International Airport Limited dividend as a result of COVID-19 - this dividend normally offsets 4 percent of rates. ( the Council is a shareholder in the Airport)
  • debt funding some other operating costs e.g. weather tight homes settlements.

These cost pressures contribute to the proposed increases in rates. We are also proposing to increase some of our fees and user charges (non-rates revenue) to minimise the impact of the increasing costs to rates.

There is more detail on these cost pressures on page 11 of our consultation document



What's the plan for rates

Our draft budget (which includes the preferred options for the seven big decisions), has an average rates increase for the average ratepayer of 5.3 percent after growth across the 10 years of the plan.

We also propose setting a rates limit across the first 3 years of the plan of $465m, and across years four to ten at $630m.

The average rates increase assumes average growth in the ratepayers of 0.6 percent per year across the 10 years of the plan.

The first year of the plan has a rates increase of 13.5 percent (after growth) and there is an average of 9.9 percent (after growth) over the first three years. This is higher than previous plans because of the cost pressures described above including earthquake strengthening, a growing and aging asset base, and COVID-19 impacts.

Therefore we now require a step up in the level of rates we charge.


Why do we need to keep some financial flexibility (or 'headroom') for the future?

We need to plan to cover unknown costs from unexpected future events. For example, another COVID-19 lockdown, another earthquake, or any other event. This is important as our budget represents a big lift in investment in the city with a $2.7b capital investment programme across the 10 years, $400m more than our previous plan in 2018.

Keeping some ability to borrow in the future is referred to as 'headroom' - its the difference between our proposed debt limit (debt-to-income ratio of 225%) and the LGFA covenant of 285% from 2025.

Without headroom we not be able to be progress projects such as Sewage sludge, city housing, Lets Get Wellington Moving and meet the demands of a growing city.

The investment in the proposed 10-year Plan means that the Council is taking on more debt and raises our debt-to-income ratio limit from 175 percent to 225 percent, which is a significant increase.

This means we can borrow $2.25 for every $1 of income. Our main source of borrowing is from Local Government Funding Agency (LGFA), which sets a hard limit above which no further lending is possible.

What's the plan for borrowing?

Our proposed plan and budget represent our highest ever level of capital investment in Wellington. It addresses the need for increased investment in our three waters infrastructure and transport network and seismic strengthening of key buildings, along with making progress against all our other priority community objectives.

There's a lot more detail more detail on 10-year plan budget in our consultation document



Want to know more about another Decision? Head back to our Long-term Plan homepage or read our full consultation document

Or, are you ready to have your say? Head to our Long-term Plan online submission form

Alongside our four big challenges, we must be realistic about what we are able to pay for and when.

Pressures on our budget means the Council has needed to make some extremely hard decisions about what is in and out of the budget. This is to ensure we do not spend more than we can afford, so that future generations are not adversely impacted and that we have the ability to respond to future events, opportunities and pressures.

Where does the money come from?

The money for operating expenses comes mainly from rates, fees, and charges from those using the services, revenue from investment income e.g. ground lease income and any Wellington International Airport dividend. Debt funds the majority of our capital projects - our development projects and renewing and upgrading our assets and infrastructure..

Why is there pressure on the budget?

Pressure on the budget mainly comes from community demand and, meeting government regulations.

New Assets


Existing Assets


Debt repayments

  • The proposed plan includes significant investment in new assets, which leads to increased costs.
  • Depreciation is the amount collected through rates each year to cover the eventual cost of replacing or renewing a share of our assets.
  • Depreciation is forecasted to double in ten years.
  • New assets are initially funded by debt which means there is also an increase in our interest costs.

  • There is a lot more investment in our existing assets, including renewing ones that have come to an end of their useful life.
  • The 10-year Plan includes the strengthening of assets such as the Town Hall and the Central Library and includes improving our three waters infrastructure.
  • This also increases costs for depreciation and interest

The Council has borrowed money to fund lost revenue (about $38m) as a result of:

  • COVID-19 and people not using Council facilities and services
  • the temporary central city libraries.
  • lost dividend for Wellington International Airport Limited dividend as a result of COVID-19 - this dividend normally offsets 4 percent of rates. ( the Council is a shareholder in the Airport)
  • debt funding some other operating costs e.g. weather tight homes settlements.

These cost pressures contribute to the proposed increases in rates. We are also proposing to increase some of our fees and user charges (non-rates revenue) to minimise the impact of the increasing costs to rates.

There is more detail on these cost pressures on page 11 of our consultation document



What's the plan for rates

Our draft budget (which includes the preferred options for the seven big decisions), has an average rates increase for the average ratepayer of 5.3 percent after growth across the 10 years of the plan.

We also propose setting a rates limit across the first 3 years of the plan of $465m, and across years four to ten at $630m.

The average rates increase assumes average growth in the ratepayers of 0.6 percent per year across the 10 years of the plan.

The first year of the plan has a rates increase of 13.5 percent (after growth) and there is an average of 9.9 percent (after growth) over the first three years. This is higher than previous plans because of the cost pressures described above including earthquake strengthening, a growing and aging asset base, and COVID-19 impacts.

Therefore we now require a step up in the level of rates we charge.


Why do we need to keep some financial flexibility (or 'headroom') for the future?

We need to plan to cover unknown costs from unexpected future events. For example, another COVID-19 lockdown, another earthquake, or any other event. This is important as our budget represents a big lift in investment in the city with a $2.7b capital investment programme across the 10 years, $400m more than our previous plan in 2018.

Keeping some ability to borrow in the future is referred to as 'headroom' - its the difference between our proposed debt limit (debt-to-income ratio of 225%) and the LGFA covenant of 285% from 2025.

Without headroom we not be able to be progress projects such as Sewage sludge, city housing, Lets Get Wellington Moving and meet the demands of a growing city.

The investment in the proposed 10-year Plan means that the Council is taking on more debt and raises our debt-to-income ratio limit from 175 percent to 225 percent, which is a significant increase.

This means we can borrow $2.25 for every $1 of income. Our main source of borrowing is from Local Government Funding Agency (LGFA), which sets a hard limit above which no further lending is possible.

What's the plan for borrowing?

Our proposed plan and budget represent our highest ever level of capital investment in Wellington. It addresses the need for increased investment in our three waters infrastructure and transport network and seismic strengthening of key buildings, along with making progress against all our other priority community objectives.

There's a lot more detail more detail on 10-year plan budget in our consultation document



Want to know more about another Decision? Head back to our Long-term Plan homepage or read our full consultation document

Or, are you ready to have your say? Head to our Long-term Plan online submission form

CLOSED: This discussion has concluded.

Check the FAQ's above on the right of this page as well as other questions below - your question may already have an answer.

Please be concise and respectful in asking questions - we will do our best to respond promptly usually by the next working day). Some answers may take a bit longer to get the details right. We monitor the site from 8:30am - 5pm Monday to Friday

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    Hi. I understand that Council intends to borrow to fund these projects. What is the timeline to repay this debt? For example is it 10 years or 20 years?

    40views asked 8 months ago

    Kia ora, 

    Thank you for your question. Below is a response from our Finance team

    We don’t attach specific debt to specific projects. Rather each project’s debt will start to be paid down when it is capitalised (the project, upgrade, renewal etc is finished) and we start depreciating the asset. Therefore a project’s debt will be paid down over the period of the useful life of the asset.

    Please let us know if you have any more questions. 

    Cheers, 

    Amy