Thomas said there was change in terms of the structure of local government and reforms going on, as well as uncertainty of government policy and reforms that were a fair way through and whether those would continue.
That also included Three Waters and whether there would be changes at governance level and the effects on the council.
Thomas said it was now looking likely that New Zealand would have a tough winter, economically.
“It was looking less likely not that long ago.” He said most of the statistics were now pointing to a slowdown.
One of the key changes was in the way society was working, partly as a result of the pandemic, but also from other changes that allowed things like working from home to be a viable alternative.
Thomas said this was a challenge to all businesses and organisations to consider how they delivered services.
He said how things were done in an office had a massive impact, coupled with a slowdown in the economy, which has affected demand for retail space through to office premises.
“Quite a few shops are starting to close in Palmerston North.”
Even though the population was growing people were buying things in different ways.
Councillor Alison Franklin commented that clothing retailer EziBuy had been put into administration.
“They’ve got five million online customers in New Zealand and Australia. That is a real sign of the times.”
Thomas said interest rates had a big impact on the council.
“It is the sharpest increase in monetary policy in 40 years.”
Thomas said that was flowing on from the abnormal historically unusual easy credit and low-interest rates New Zealand had for a number of years.
“We’re now seeing a response to that.”
That also had an impact on the council in terms of operating costs.
“All the debt we have, gradually over time, becomes a lot more expensive to service,” Thomas said.
He said that would have a big impact on rates.
Further to the environmental scan it was noted that population growth had slowed, driven mainly by the closure of the country’s borders.
“In the latest data that we have, the population in the Tararua District has slowed from a reasonable level of growth down to fairly slow levels.”
Thomas said demand for rental property had not eased, and there was no evidence that there was an outflow of people.
Cost structures, interest rates and falling property prices had led to a drop in development activity, meaning it was very difficult for developers to build houses so many projects had paused.
Thomas said Cyclone Gabrielle will “have a big impact on things in the Tararua District for quite a while”.
He said because of the civil works and rebuilding going on, from Tairāwhiti through to the district, contractors for normal maintenance would be tough to find.
“There was already a shortage of skilled workers in this area before the cyclone.”
While Waka Kotahi would fund most of the repair work on the district’s roads, it would not automatically repair every damaged road.
Thomas said for any major repairs in remote areas, a business case had to be made before the money was allocated.
He said where minor roads had significant damage “there may be some interesting discussions about the future”.
The scan also noted a concern about the ability for many farms facing expensive repairs to absorb a large rates increase.
“Council is in a difficult position with costs to deliver services having increased significantly during 2022,” the report stated. “Increasing rates by lower than these costs will result in rates having to be increased even more the following year, levels of service reduced or efficiencies found.”
Council would be holding further discussions on the environmental scan.
