29 May 2017

Auckland Council must honour its commitment to business

Heart of the City is calling on Auckland Council not to treat business rate payers as easy targets in its drive to save costs.

In 2013, Auckland Council decided to reduce the rates differential between businesses and residential properties over a period of 20 years. Currently Auckland businesses pay 2.73 times more rates than other rate payers.

The Council is now proposing to pause the reduction in the business differential for a year. As the final decision on the Council’s annual budget looms, Heart of the City is urging Council to honour its commitment to reduce the business rates differential.

“We made it clear in our submission on the draft budget that the process to reduce the business rates differential should continue without a break. We are seeing a disturbing trend that businesses are being seen as an easy target,” said Viv Beck, Heart of the City’s Chief Executive.

“Council recognised the importance of business in growing the economy and providing jobs when it introduced the rates reduction. Continuing to push for ad hoc rating changes is reneging on this promise. There seems to be an assumption that business can afford it but many businesses are small to medium in size without large reserves to draw on to cover unexpected costs.”

“This time last year, Council proposed a change to shift the burden of the interim transport levy on to business one year into a three-year agreement. Fortunately this was voted out by Councillors and we ask them to pause before voting this year to consider the impact of ongoing rating uncertainty on businesses in their own local areas,” said Ms Beck.

Heart of the City also made it clear in its submission on the annual plan that it did not support the Council’s proposal to fund tourism promotion through a targeted rate on accommodation providers.

“We need an effective way to fund infrastructure but a targeted rate on accommodation providers is not the right mechanism. It’s an unfair fix that will be difficult to implement at short notice, particularly as it will hit property owners in the first instance,” said Ms Beck.

“Further, businesses in Auckland’s CBD already make a significant contribution to the development and revitalisation of the city centre through the City Centre Targeted Rate. Given this, and the commitment in 2013 to reduce the business differential, we urge Council to honour its commitment to business and cease this practice of short-term fixes that load costs on to business. We don’t want to be back again next year facing the same problem with a different name,” said Ms Beck.

End.

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