A Tale of Two Cities: Tauranga’s Own Debt Crisis

You may have come across the recent story about Christchurch City Council having “serious financial issues”. As a sustainability organisation, that made us wonder how sustainable are Tauranga City Council’s finances?

Tauranga City had about 158,300 residents in June 2022, whereas Christchurch City was home to 389,300 people (2.5 times Tauranga’s population).

Tauranga City Council had 60,130 ratepayers according to its 2022 Annual Report, whereas Christchurch City had 177,411, which is 3 times the number of Tauranga ratepayers!

So how do Tauranga City Council’s finances stack up against Christchurch City Council?

2023-24 Gross Debt:
Christchurch $2.66 billion
Tauranga $1.12 billion

2023-24 Net Debt:
Christchurch $1.65 billion
Tauranga $1.05 billion

Forecast 2023-24 Net Debt as percentage of total revenue:
Christchurch 144%
Tauranga 222%

Forecast 2023-24 Net Interest as percentage of total revenue:
Christchurch 7%
Tauranga 9%

Forecast 2023-24 Net Interest as percentage of annual rates revenue:
Christchurch 11%
Tauranga 13%

Therefore, Tauranga has about 1/3 the number of Christchurch’s ratepayers, but it has nearly 2/3 of Christchurch’s net debt. That means Christchurch’s net debt per ratepayer is $9300, whereas Tauranga’s net debt is nearly double that, at $17,642 per ratepayer.

What’s more, TCC’s interest costs as a percentage of revenue (something Christchurch’s mayor is worried about) are forecast to be significantly higher than Christchurch by the end of this year. Sustainable BOP has calculated that around $1000 out of an average Tauranga residential ratepayer’s 2024 rates bill will go solely to pay the interest on TCC’s debt.

It gets worse. Tauranga also has ‘off the books’ (IFF) debt. The interest on Tauranga’s initial IFF loan will total $348 million over the next 30 years.

Which means next year, a median residential ratepayer will pay another $68 (on top of the $1000 to cover TCC’s interest bill) to repay the extra ‘off the books’ debt we’re already committed to repay.

That’s before you even start to pay for all the council services, TCC staff costs, rubbish and recycling collections, water rates, and so forth – let alone think about actually repaying any of the Council debt. As for investing in a resilient, low carbon city…

Some Christchurch councillors are horrified that Christchurch Council may consider selling off some assets to reduce debt. Contrast that to Tauranga, where TCC is actively planning to sell both its parking buildings plus a number of other properties – not to pay off debt, but to help fund its Civic Centre development.

However that’s not the worst news. The really bad news is that TCC is planning to take on much more debt, yet even with all that extra debt, it is not planning to fund all required essential infrastructure.

When planning its Draft 2024-34 Long Term Plan (LTP) earlier this year, TCC left 3 waters out of its infrastructure investment plan. That was on the basis that the Labour government was going to transfer its 3 waters assets and debt next year and give them to a new 3 waters entity.

We’re concerned that TCC didn’t include 3 waters in its 10 year plan – especially because the rest of NZ (other than poor Tova O’Brien and a few others) have known for the past year that there’ll be a change of government to one comprised of parties that consistently promised to scrap Labour’s 3 waters reforms.

The election result means TCC is likely to be rushing to insert three waters infrastructure costs into its upcoming LTP consultation and it has indicated that will add another $2.2 billion in capital expenditure by 2034. The kicker in regards to that $2.2 billion is that TCC also states: “it is cost-prohibitive to deliver all necessary initiatives within the upcoming 10-year timeframe”. That means some “necessary” 3 waters projects are still not going to be included in TCC’s 10 year plan.

In summary:
– TCC already has a worse debt situation than Christchurch
– TCC’s debt is likely to increase to $1.55 billion by June 2026
– There’s an additional $177 million ‘off the books’ IFF debt
– There is likely to be even more ‘off the books’ debt to come
– There’s currently $2.2 billion shortfall in 3 waters funding to 2034
– Even if that $2.2 billion is included, TCC isn’t planning to fund “all necessary” 3 waters infrastructure
– Commissioner Tolley has stated Tauranga’s transport plan has an additional $4 billion of currently unfunded transport infrastructure
– Tauranga’s residential rates are already the highest of any NZ city (well above Christchurch and higher even than Auckland)

All of that is in the context of this media report in June 2023:
Tauranga commissioners have reluctantly agreed to an increase in residential and commercial rates but say the city is “going backwards” by not matching or bettering inflation – and they have signalled higher rates in the future.

That said, we note that TCC is still proceeding with its planned international exhibition centre and it will also include the proposed Tauranga Domain stadium in its LTP.

That highlights a key sustainability issue for Tauranga:
Is it more important to invest in the essential transport and three waters infrastructure that this city needs, or the upgraded city centre facilities that some people want?

All that raises one final question:
If Christchurch’s finances are “up s!@# creek” according to its mayor, how would the Commissioners describe Tauranga’s finances?






  1. Get the infrastructure right first then go for the improvements. There is another very wet year coming starting I 2026 so preparing would be a good idea.

  2. The Commissioners have exceeded their brief which was essentially to restore Tauranga’s proper governance. They seem to think that they are charged with building a “great (?) city” and seek to commit its unfortunate inhabitants to unbearable debt for the sake of monuments to themselves. Rome was not built in a day. The sooner the Commissioners are gone the better. In the meantime their irresponsible spending must be curbed.

  3. The rate rises are far outstripping increases for those on fixed incomes. Ultimately, the labour appointed commissioners are responsible for this mess and they must go as soon as possible, {National take note).

  4. On top of all that they are proposing a congestion tax which will affect A very large proportion of residents.

  5. For every person in a retirement village there is another person looking after them or the village. Had we restricted the number of villages way back we would not have a situation whereby we needed so many houses,(not built and supplied by the villages for their staff). and the situation would have been much better. Instead, we pandied to these organizations with cheap land and facilities thus creating the city’s problems. We have now done the same with the gib plant. Every bit of product in and out is carted on a truck. How dumb was that decision?
    We allowed NZTA to take over the motorway without an end to tolls and without fixing Turret Road and another bridge. I don’t know who does the thinking downtown but frankly, they should be retired urgently before they create more problems.
    We have a housing problem because the council and Priority One created it. They seem to think that Growing their economy will fix it. It won’t.

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