'They can turn the tap on a bit more and you don't have a choice'

Ratepayers across the country could see their rates bills rise, as councils struggle to find funds for critical infrastructure, Local Government New Zealand says.

There's been a lot of news this week about Aucklanders and their rates bills.

But that caused a bit of consternation around the rest of the country from people whose rates bills are higher, while their houses are worth much less than the average Auckland villa.

At the same time mayors around the country are calling on the government to help as they face huge bills in maintaining and building new infrastructure.

Just a few hours south of Auckland, Waitomo District has some of the highest rates in the country.

Robert Henderson's Te Kuiti home is worth a little under $200,000, but he pays $3400 a year in rates.

Mr Henderson is retired but his wife still works and it's tough finding the $130 a fortnight to pay the council

Fellow Te Kuiti resident, Russell Smith, pays $3500 on rates, and his house is worth nearly $300,000.

He said housing was cheaper than in the city, but the rates were high.

Mr Henderson said like electricity bills, rates just had to be paid.

"And councils, funnily enough ... they can turn the tap on a bit more and you don't have a choice.

"There's no other business I can think of that can turn the tap on a bit more when they need more money."

Mr Henderson said councils were under a lot of pressure, and the government could do more to help.

Minister for Local Government Nanaia Mahuta said she won't rule out regional taxes or mining royalties, to make rates more affordable.

"We won't rule out our options, but serious consideration of the options need to be done in conjunction with local government New Zealand and local authorities to stage out what a plan might be."

She said smaller districts face their own unique challenges.

"It's clear for small towns that they have a low rate paying base, it's only been in the last few years that people have moved to rural areas because of the high cost in Auckland.

"It's also true to say that some of the infrastructure costs are legacy issues and over a period of time it has been difficult to raise the money locally, to provide for things like water infrastructure as population growth happens."

'Every formula shows it can't be funded locally'

Mayor of Waitomo District Brian Hanna said there was no way the wider district can be expected to help pay for infrastructure needed to cope with 700,000 tourists coming to see the caves every year.

"In the Waitomo caves area, where we do need a new solution to water and wastewater, we're working through a process now [to look at] how we actually fund that.

"Every formula we come up with shows it can't be done locally, it has to be done with some national assistance."

Mr Hanna backs a proposed tax on tourists coming into New Zealand to help with the cost.

But it is not just tourism that is causing councils to worry about the cost of infrastructure.

Mr Hanna said people from Auckland looking for cheaper housing had previously only been moving as far south as north Waikato.

"But now it's widespread, I think every small town in New Zealand is under housing pressure.

"We've welcomed growth, but of course suddenly we've got housing situations without the capacity to deal with it."

Rates increase on the way for Hamilton

Further north the Hamilton City Council has warned a 16 percent increase in rates is likely next year.

Mayor Andrew King said the increase is needed for infrastructure, transport and community projects required in the rapidly growing city.

The city's residents' and ratepayers' association president, Mischele Rhodes, said the increase came as a bit of a shock, and people will be worried.

Ms Rhodes said the average bill is more than $2000 a year.

Local Government New Zealand vice president Stuart Crosby said historically central government helped pay for infrastructure.

"It wasn't just roading, which is still the case, it was also water, wastewater and sewerage schemes, some pensioner housing, community facilities and catchment schemes and the quid pro quo was the government of the day didn't pay general rates.

"Now, by and large, they still do not pay general rates, the infrastructure is up for renewal and it's landing on the ratepayer."

Mr Crosby believes the new government will act fast in coming up with solutions.

Last month Regional Economic Development Minister Shane Jones announced a $1 billion package to go towards growth in the provinces.

Work was still underway to figure out the best way to deliver the money, he said.

"Critical infrastructure, such as provincial roading improvements, rail and maritime facilities, as well as sector-led projects such as tourism, aquaculture and forestry will be among the types of capital investment the government will be looking to make in our regions."

Mr Jones said projects would have to meet certain criteria to be considered for the funding, including the creation of jobs, sustainable economic development, and enhanced social inclusion.