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Rates differential policy needs review

Rates differential policy needs review

The movement in Wellington City Council’s commercial/residential rates differential needs to be reviewed, says Wellington Mayoral candidate, Timothy O’Brien.

At the moment the differential, which was once at a ratio of 7:1 and is currently at just over 5:1 is slated to move to about 2.3:1. That means residents will have a 54 per cent rise in the rates not including any rise for extra spending or debt.

“This policy has proven to be one of the key topics of this election which is constantly raised by all sorts of people,” Tim O’Brien says.

“When its supporters have been asked to explain it, they are unable to provide the rationale for the final movement and simply resort to comparisons between a small business such as a dairy and a home. The current Mayor told a Grey Power audience who asked about it – that she was ‘talking to the wrong audience’.”

Noting that the people who are most worried are more likely to be the right audience if you want to justify a policy, Tim says that the policy doesn’t really stack up on the small business comparison used by its supporters.

“They say that 85 percent of Wellington businesses employ fewer than five people and 95 percent of businesses are categorised as small. However, these employers are mostly homeowners too and will pay little less as the rates burden shifts to their homes and those of their employees.

“That means that instead of their rates burden falling on their business where it is a deductible business cost, they will just have the same burden but now on their homes and staff will need more pay.

“It’s easy to see that the policy doesn’t really benefit everyone and causes more negative effects on those already struggling – especially those on fixed incomes.”

Tim O’Brien says the basis of the differential change needs to be re-examined and its final ratio changed accordingly.

© Scoop Media

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