Regional Council average rates increase of 0.4% confirmed amid economic pressures

May 2026

A summary of key decisions has been provided at the end of this media release.

Bay of Plenty Regional Council has confirmed key decisions for its Annual Plan 2026/27 following deliberations held on Monday 25 May, striking a careful balance between affordability and the delivery of essential regional services.

The deliberations mark a significant milestone in the Annual Plan process, incorporating community feedback gathered earlier this year, and setting the Regional Council’s work programme and budget for the year ahead.

Regional Council Chair Matemoana McDonald says councillors have taken a disciplined and pragmatic approach in response to ongoing cost pressures facing households and businesses.

“We know many people across our region are doing it tough, and that has been front of mind throughout this process.

“Councillors have worked hard to make responsible, balanced decisions, prioritising the services our communities rely on, while keeping costs as low as possible.”

Through a combination of careful financial decision making, finding efficiency savings and continued dividend contributions from Quayside Holdings, the Regional Council has confirmed an overall average rates increase of around 0.4%.

The 8.4% general rates increase originally forecast in the Long Term Plan has been reduced to 2.9% (including growth and inflation), with total targeted rates decreasing by 2.2%.

Chair McDonald says these figures reflect a strong focus on value for money and careful financial management.

“This is about making every dollar count. We’ve made some difficult trade-offs to focus on core services by deferring or reducing non-essential spending where we can.

“At the same time, we’re continuing to deliver on the work that matters most – protecting our environment, supporting regional resilience and planning for the future.”

A key outcome of the deliberations is the establishment of a new Regional Benefit Fund of up to $20 million for 2026/27. The fund will support large-scale projects that deliver environmental, economic, social and cultural benefits across the region, and will be funded through existing reserves and investment returns, rather than rates.

The Regional Council also confirmed a number of targeted investments to support long-term regional outcomes, including funding toward regional reorganisation planning and implementation of the Western Bay of Plenty City and Regional Deal, recognising the importance of being prepared amid ongoing local government reform.

In Rotorua, the Regional Council will continue work to improve water quality through its purchase of Kererū Farms, a 266ha dairy farm that will be transitioned to low-nitrogen land use to support long-term nutrient reduction targets. Ongoing costs for this work will be funded from reserves to avoid additional pressure on ratepayers.

Protecting the region’s natural assets remains a priority, with funding approved to develop a new ‘proof of concept’, high-assurance biosecurity approach for the Rotorua Lakes. This work aims to reduce the risk of invasive pests and safeguard lakes of significant environmental, cultural and economic value.

There were also several decisions made relating to public transport, including fare adjustments and the future of the Baybus OnDemand trial in Tauranga South.

While the Baybus OnDemand service achieved strong customer satisfaction and significantly higher patronage than the previous fixed-route service, councillors agreed not to extend the trial beyond December 2026.

Chair McDonald says the decision reflects the difficult balance between service improvements and long-term financial sustainability.

“This was not a decision taken lightly. We know the Baybus OnDemand service has been valued by its users and has performed well.

“However, continuing it would require a significant ongoing subsidy. We have a responsibility to balance that cost against the needs of the wider public transport network and the affordability for ratepayers.”

Further work is underway to identify future public transport options for Tauranga South, informed by the lessons learned through the trial.

From July 2026, a 3.1% fare increase will be applied across the urban public transport network, reflecting rising operating costs and reduced external funding while supporting the continued delivery of services.

“Our goal is to maintain a reliable and sustainable public transport system for the long term,” says Chair McDonald.

“These decisions ensure we can continue to provide essential services while managing increasing costs in a responsible way.”

Decisions made through the Annual Plan also reflect a strong focus on iwi relationships and support, with $150,000 allocated to enable an iwi-led Tauranga Moana Strategy, and approval to investigate options for establishing a technical hub that will provide specialist support to iwi and hapū.

Chair McDonald says the Regional Council’s approach has been about putting the region in the best possible position, both now and into the future.

“We’ve taken a long-term, region-first view, making sure we’re not only responding to current pressures, but also planning ahead for what our communities will need in the years to come.”

The Annual Plan will be formally adopted on 25 June 2026 and will take effect from 1 July 2026.

You can view a recording of the Annual Plan 2026/27 deliberations here.

Summary of key decisions

General rates increase set at 2.9%, reduced from 8.4% forecast.
Total targeted rates decrease of 2.2%, although individual changes vary depending on the level of service provided.
Overall average rates impact of approximately 0.4% increase
Establishment of a Regional Benefit Fund of up to $20 million to support large-scale projects and infrastructure that deliver environmental, economic, social and cultural benefits.
$620,000 in ongoing Kererū Farm land purchase costs funded from reserves to avoid additional pressure on ratepayers, while enabling the transition of the Rotorua property to low-nitrogen land use.
Funding for regional reorganisation and long-term planning, which includes $1 million for regional reorganisation planning and $170,000 toward the Western Bay of Plenty city and regional deal.
$250,000 approved for Rotorua Lakes biosecurity system development to support a ‘proof of concept’ for a high-assurance biosecurity pathway system that’s aimed at reducing the risk of invasive freshwater pests, such as freshwater gold clam.
$150,000 to support an iwi-led Tauranga Moana Strategy, supporting ongoing partnership with tangata whenua and delivery of improved environmental and community outcomes.
Baybus OnDemand trial to conclude in December 2026. While the service delivered strong patronage and customer satisfaction, it requires a significant ongoing subsidy. Further work is underway on future service options for Tauranga South.
Urban public transport fares to increase by 3.1% from July 2026, with individual fares rounded up to the nearest 10c. The fare adjustment reflects rising costs and reduced external funding, while helping maintain a reliable and sustainable public transport network.
No additional biodiversity funding in 2026/27, with current investment levels to be maintained. Future funding will be considered through the next Long Term Plan, alongside development of a Regional Indigenous Biodiversity Strategy.