Lower rates rise than forecast to be included in Draft Annual Plan

A lower-than-expected rates increase for the next financial year is proposed for Invercargill and Bluff residents.

An update on the 2026/2027 Annual Plan was presented to Invercargill City Council this week.

The 2026/2027 Annual Plan would include a proposed average rate increase of 6.93 percent (comprised of a 5.52 percent three waters rates increase, and a 7.75 percent non-waters rates increase, which was below the 8.43 percent increase average forecast for the financial year in the Long-term Plan 2024-2034.

The final 2026/2027 Annual Plan is scheduled to be adopted by elected members in June.

Invercargill Mayor Tom Campbell said heading into confirming the Annual Plan, Council found itself in an extremely complex and challenging economic environment.

“Households are operating in a time of great uncertainty and financial pressure, and Council is no different. It is always a fine balancing act between ensuring we are able to deliver the essential services our community wants and needs with affordability,” he said.

“Ensuring we are not simply delaying inevitable infrastructure and service costs, for future generations to deal with down the road, is also critical during this process.”

A number of positive and negative factors had contributed to the lower-than-forecast increase, but especially of note was the $5.4 million efficiency improvement programme within Council itself, he said.

Council had also resolved to reduce the Community Wellbeing Fund to $500,000 per year, and amended the operational services at Wachner Place.

Invercargill City Council Group Manager Finance and Assurance Patricia Christie said the proposed average rates increase was close to a rates target window the Government planned to impose on local authorities throughout the country.

“While Council’s proposed rates increase for 2026/2027 sits slightly above the likely rates target window, it includes two major items – the continued development of Te Unua Museum of Southland, and funding the repairs required throughout the community following October 2025’s state of emergency – that sit outside of the core services framework,” Christie said.

In 2025, the Government announced its plans to introduce a national rates target.

For Invercargill, the target range was likely to be somewhere between 2 and 5.5 percent for non-three waters core services, with legislation expected to be drafted later this year.

Council was required to transition to a new way of charging for, and providing, water services and as part of this, preparation was being done to separate water and non-waters costs, with the Annual Plan including more investment to enable this. More changes would be seen throughout the year ahead, including different requirements for commercial water users, Christie said.

Council would consult with the public on how it planned to fund the future growth of water services, alongside fees and charges for 2026/2027, she said.

Submissions could be made here.

Click here to read the 2026/2027 Annual Plan Update and watch the livestream of the Council meeting.