Growth Does Not Pay For Growth

Photo: NZME BOP Times

Tauranga City Council told us all for years that “growth pays for growth”. It eventually admitted that wasn’t true, and today’s paywalled BOP Times article shows how growth can go ‘off the rails’ and leave ratepayers with $735 million debt.

Key points:

– Te Tumu development (between Papamoa East and Maketu) now delayed until 2040s

– Intention was for Te Tumu development to pay most of the transport and 3 waters infrastructure costs in that part of the city incurred by TCC

– That infrastructure was needed to support homes already built and being built soon in Papamoa East, as well as the 7000+ houses planned for Te Tumu

– TCC will end up with $310 million of debt to pay for that infrastructure

– The delay in Te Tumu means this TCC debt incurs extra interest, compounding for the next 20 years or so, or until Te Tumu is finally developed

– That’ll result in $735 million of council debt relating to Te Tumu by 2045!

– Everyone agrees this level of extra debt would be a disaster for the city

– To stop debt blowing out that much, ratepayers need to start paying the interest bill for Te Tumu now

– TCC’s plan is to introduce yet another targeted rate (on top of everyone’s existing rates bills), starting next year at $172 for Papamoa East & Wairakei residents, 

$115 a year for some other Papamoa ratepayers, and $57 per year for everyone else in Tauranga.

– That just pays off some of the interest charges, but would still leave TCC with $552 million debt for this growth area by 2045

– The alternative is to not have the targeted rate, but that would leave the full $735 million debt, which would need to be repaid by a levy of more than $100,000 on every section eventually sold in Te Tumu

– At $100,000 per property (in today’s $), on top of the property price itself, that means section prices would be even more unaffordable and the whole Te Tumu development may not be viable

– Also remember that ratepayers will be paying far more than initially anticipated to fund the extra growth required in Tauriko to replace the delayed Te Tumu development, so that adds another layer of cost to pay for the city’s growth

The lesson from this is that our current growth model is unsustainable. Growth does not pay for growth – we all pay for growth, in many different ways.…/SMBYJNAP5BDSRCMXP63JKHMVQA/…/CO_20230911_AGN…


  1. Thank you Glen your article will stimulate more thinking about what Council says and what it really does. I trust that your efforts to create an understanding of sustainability will additionally produce an awareness of the social impacts of this thing called “growth” It’s not just boundaries and profits for for a few but a raft of costs for many and structural poverty for those trapped. The growth scenario assessments need a real futures revision in my view given global impacts. It feels like a fantasy with open border freedoms.

    1. Yes Carole, we think there’s a real danger of chasing economic gains with an unsustainable growth model that results in worse environmental and social outcomes, and also worse economic outcomes for many current residents, due to the proposed new road charges and the further big rates increases needed to fund growth.

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