Taupō District Council has confirmed its draft financial direction for the 2026/27 Annual Plan, with a proposed average rates increase of 6.6 per cent, including water services.

The increase is slightly lower than the 6.7 per cent forecast in the Longterm Plan 2024–34, which was adopted in September 2024. The revised figure reflects costcontrol measures and tradeoffs to respond to affordability concerns while continuing to fund essential services.

These include deferring some planned projects, tightening operating assumptions, and avoiding higherrisk options. Council has focused on protecting essential services and infrastructure while managing costs.

Nearly half of the 6.6 per cent figure, or 2.9 per cent of the increase relates to water, with the council responding to central government demands to invest more in water services and separate them from other council activities.

Since the Longterm Plan was adopted, Council has faced significant unforeseen cost pressures, particularly increases in core areas such as depreciation, contracts, water services levies and debt servicing. Without changes to budgets and assumptions, the rates increase for 2026/27 would have been closer to 7.7 per cent.

While the 6.6 per cent is a draft figure, it is subject to change before the Annual Plan is adopted on 30 June if economic conditions worsen. Fuel uncertainty and interest rate increases may affect the timing or cost of some projects.

Taupō District Mayor John Funnell said councillors were conscious of the strong affordability messages coming from the community, including during last year’s election.

“We heard clearly from our community that cost of living and rates affordability matter, and that’s front of mind as we work through these decisions,” the Mayor said.

“Getting to a 6.6 per cent increase hasn’t been easy. It’s required some careful choices about what we can deliver in the short term, and where we can slow things down or manage risk, rather than pushing costs onto ratepayers.”

Councillors also considered the wider policy environment when setting the draft financial direction. While rates caps have been widely discussed nationally, no rates cap is currently in place, and none applies to the 2026/27 Annual Plan. Based on current government signals, any future ratescapping approach would not include water services, which continue to face substantial cost pressures.

Council also noted that an Annual Plan allows only limited changes to what was already been agreed through the Longterm Plan 2024–34. More significant decisions about levels of council service will be considered through planning for the next Longterm Plan 2027–37, which is already underway.

Councillors are currently working through a series of workshops to look at where changes could be made in future years to help manage rates increases. These are livestreamed and can be viewed on the Taupō District Council YouTube channel.

The 2026/27 Annual Plan will be adopted by Council later this year, setting rates and budgets for the coming financial year.

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