The HB Regional Council used its first workshop of the year last week in part to zero in on difficult aspects of its 2025/26 budget.

HBRC’s 3-Year plan had signaled average rate increases of 18.3% for 25/26 and 8.55 for 26/27. Following more detailed analysis, which identified $5 million in potential savings, the new rate estimates are 11.9% for 25/26 and 9.5% for 26/27.

This table illustrates the main changes.

I note the projected savings are potential at this stage because: 1) workshops don’t make official ‘decisions’ (!), and 2) a number of components are deemed significant and/or controversial enough to require public consultation.

The two savings changes likely to generate public consternation in some quarters involve $1.35 million cut from biodiversity spending and elimination of HBRC’s current $500,000 contribution to funding of the Regional Economic Development Agency.

Biodiversity programmes have a devoted constituency in Hawke’s Bay, and Councillors themselves do seem to regard these activities as part of HBRC’s core mission. But these programmes, like everything else, are being weighed against the big spending requirements that lay ahead for flood resilience. The staff paper prepared for the workshop noted: “If people want to see biodiversity prioritised and we put money back in the budget it will mean a rate increase (every $475,000 funded  equals a 1% increase in rates.” So restoring, say $1m, would bump rates nearly 2%. 

REDA, on the other hand, is still just gaining traction, and does not appear to have a determined ‘spearcarrier’ amongst the Regional Councillors. The Napier and Hastings Councils also each contribute $500,000 to the REDA budget (CHBDC and Wairoa lesser amounts) and reportedly are leaning hard on HBRC to ‘honour’ its previous funding commitment.

Balking at REDA funding effectively represents HBRC doubling down on its defunding of HB Tourism, on the premise that ‘economic development’ is not part of its core mission of managing the region’s environment and natural resources, especially in times of severe budget duress.

Of course it’s extremely difficult to disentangle economic considerations from environmental considerations – water allocation perhaps as the most vexing of many examples.

Also affecting the ultimate outcome for REDA funding is (or should be) the so-called ‘regional architecture review’ that is looking at how the variety of current overlapping players (and public funds) in HB’s economic development space should be organised and tasked. This includes REDA, the HB Regional Recovery Agency, the economic development units of the four territorial councils, and HB Tourism. That review is unlikely to emerge from the Matariki Governance Group into public view until late March at best, although official insiders will know the direction of travel before then.

One might think any economic development funding decisions by any councils should await some sorting out of who is on first base! But that requires the Matariki review process to be in synch with councils’ budget planning schedules.

Other issues will be presented in HBRC’s final public consultation document, including feedback on the region’s public transportation investment and the financing of HBRC’s payment for HDC’s flood resilience work on Havelock North’s Mangarau Stream.

Formal decisions on all of the above will be made by HBRC later this month, with adoption of a final Consultation Document at the 26 March Council meeting.