23 March 2012

Rates transition benefits business

Thousands of Auckland businesses will receive a rates reduction because of proposed changes to the business rating system.

Auckland Council Finance & Strategy Committee Chair Penny Webster says the proposed business rates transition policy means that more than 11,000 Auckland businesses will receive a rates reduction in the first year.

In response to the Chamber of Commerce calls for an Auditor-General investigation, Cr Webster notes that the Auditor-General has already been involved in reviewing the council’s draft Long-term Plan and has given it an unqualified opinion.

The council is proposing average rate increases in the coming financial year of 3.6 per cent, which is down from the 9.3 per cent increases the council faced after amalgamation.

However, as a result of merging the previous systems of the eight former councils to a single system as required by government, some property owners rates will go up and some will go down.

"It's important to note that the same proportion of rates will be coming from the business sector as from the combined old councils, and rates differentials for businesses will reduce over the next 10 years," says Cr Webster.

The eight legacy councils all had different business differentials. A level of 2.63 to 1 was set so business would continue to contribute the same proportion of rates revenue.

"Auckland Council is focused on driving efficiencies in the organisation to keep costs affordable for Auckland businesses and homeowners,” says Cr Webster.

ENDS

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