Business alarmed at Whangarei Council's rating practice, rates increase

Whangarei District Council attracted stick today from the Employers & Manufacturers Association who said the Council charged its business ratepayers one of the highest differentials north of Taupo, and was increasing rates by more than double the rate of inflation.

"The Council is obliged to spell out to its ratepayers why it needs to do this," said Alasdair Thompson, EMA's chief executive.

Every year the EMA analyses the Annual Plans and related funding documents of all the major councils in the northern region.

In the Whangarei area the EMA has 280 member businesses with about 5600 staff with a total payroll estimated at $174 million a year.

"We were alarmed to see the Whangarei District Council is planning to charge its commercial and industrial ratepayers a general rate five times more than residential ratepayer's pay, on land of the same value," Mr Thompson said.

"In its Draft Annual Plan the Council provides no explanation for doing it.

"We are strenuously opposed to imposing a differential rate on properties used for business purposes.

"There are no tax or GST advantages of rates for business. Neither is there any evidence that business has a greater 'ability to pay'.

"Over 92 per cent of New Zealand businesses employ fewer than 10 people. Neither these businesses nor their owners enjoy incomes above the average income of other New Zealanders, and they should not be treated unfairly.

"Most councils have revised their thinking on the practice and are starting to drop the differential because they are a strong disincentive for businesses to grow and generate more jobs.

"The five per cent increase in rates overall is also too high, over double the rate of expected inflation this year.

"Though we disagree with some of its decisions, nevertheless we found the Council's funding policy analysis very clear and commend it for that.

"Other things we recommended to the Council included:
* let the private sector own and operate the proposed new landfill and waste stations,
* consider selling its shares in the Whangarei airport,
* ask what its objectives are in subsidising the housing costs of some elderly people in the area,
* increase its income from Uniform Annual General Charges to the maximum of 30 per cent permitted by law.

Comments: Alasdair Thompson tel 09 367 0911 (b)
09 303 3951 (h)
0274 982 024
Gilbert Peterson Communications Manager
DDI 64 9 367 0916 Fax 64 9 367 0903

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