Peter MacDonald
Dunedin’s debt crisis isn’t a crisis at all for those profiting from it. For the corporate stakeholders, contractors, consultants, financiers and advisors, it’s a stable business model built on the unwavering reliability of the Dunedin ratepayer.
In fact, Dunedin ratepayers are among the most dependable debt underwriters in the Western world. They pay without protest – without revolt. Even as debt balloons and rates skyrocket, they keep their heads down and sign the cheques. This is the grip the financial and corporate class holds over the city: they know Dunedin will pay.
Council debt is forecast to reach $2.3 billion by 2030, with interest payments exceeding $3 million per week – a staggering $156 million per year, funded largely by a shrinking ratepayer base that contributes $203 million annually. Most cities would rebel. Dunedin complies.
It’s here that a bitter parable applies; one written in blood on the fields of the Somme in World War I. Horrified German soldiers recorded in their diaries how the British working class men just kept coming. Conservative, loyal and obedient, they marched forward into machine gun fire, into the ‘steel rain’, wave after wave, until the last man fell.
That’s the Dunedin ratepayer: loyal, conservative and compliant. If it means sacrificing their last pay cheque to stay out of rates debt, they’ll do it. Not out of weakness, but out of ingrained responsibility.
And the stakeholders know it.
That’s why Dunedin is targeted. Not because it’s failing but because it’s reliably profitable. The ratepayers aren’t being protected, they’re being harvested. Their loyalty is being weaponised against them by a system designed to extract wealth and call it progress.
So when we’re told to raise rates again, we must ask: whose interests are really being served...
Because Dunedin’s debt burden may be breaking its people, but for the profiteers behind it the machine is working exactly as intended.
What many don’t realise is that this ever rising debt is a product of a seismic shift in governance and financial philosophy. Before the 1980s, Dunedin ran itself in the black. The council’s services from electricity and water to roads and infrastructure were delivered by in-house consultants, civil engineers and council workers. These were local men paid modest wages by the ratepayers, often lifetime employees who took genuine pride in serving their community. This was a community-based governance model, focused on stewardship and public good.
But since the 1980s, with the rise of the Chicago School of Finance led by Milton Friedman’s ideas and filtered through the City of London’s James Goldsmith model, and later implemented in New Zealand via Thatcherism, Reaganomics and Rogernomics (1984), everything changed. The old model gave way to a for-profit, authoritative system that prioritises financialisation, outsourcing and market-driven management. Power shifted away from mayors, councillors and community control toward bureaucracies and private corporations.
This new model strips Dunedin ratepayers of financial freedom and democratic control. Debt is no longer a temporary burden but a revenue source for private firms. Ratepayers pay more, services cost more and profits flow out while local pride and stewardship are replaced by a cold calculus of contracts and returns.
The council currently collects roughly $203 million in rates revenue annually. Rates make up about 60–65 per cent of Dunedin’s total operating revenue, with the rest coming from fees and charges, government subsidies, dividends from council-owned companies such as Aurora and Delta, rental income, development contributions, and other smaller sources. Together, these other revenues add roughly $120–140 million annually, but none approach the scale or reliability of rates.
So when austerity is demanded and rates rise, it’s not just financial necessity – it’s the machinery of a profit-driven system operating on the city’s lifeblood.
The question remains, are we managing our city for the public good or for private profit?
One of the most devastating consequences of this system, yet rarely spoken of, is the homelessness crisis a direct result of the for-profit model. In New Zealand, it slides under the radar, masked by a culture of silence and shame socially engineered around poverty. This isn’t new. Go back to the early 19th century in Britain, or in Dunedin itself, and you’ll find the destitute and unemployed were criminalised. Many of Dunedin’s early public works were built by prison labour men who were, in reality, simply unemployed and then gang pressed into prison work gangs.
Today, the state doesn’t chain the homeless, but the shame built into being poor is a prison in itself. The modern system has simply replaced forced labour with wraparound services, creating a sprawling welfare industrial complex. It’s a form of corporate welfare, profitable for those who manage it but often fruitless for those trapped inside. Despite millions spent, the number of those homeless only rises. Not just the visibly unhoused, but couch surfers, people living in cars and vans, people sleeping rough in parks or doorways in the city and the invisible ones, too: seasonal workers in the Otago region earning a wage but roughing it in bush locations or cars and backpackers sleeping in the Town Belt, moving city to city, hiding in plain sight.
This isn’t failure. This is design. Poverty, like debt, has become an industry. And as long as shame silences it, the system thrives. I’ve seen this up close when I visit Christchurch: certain charities hand out backpacks to those homeless folk who are younger and fitter than the average, so they can carry their bedding around with them and sleep along the Avon River or elsewhere. It has been normalised.
