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ARC vote for differentials illegal and unethical

ARC vote for differentials illegal and unethical

The vote today by the ARC to impose an extra 50 per cent onto the rates of all business property owners is neither lawful nor ethical, the Employers & Manufacturers Association (Northern) claims.

"The outcome of today's crucial vote will increase business rates by 50 per cent while subsidising residential ratepayers by about five per cent," said Alasdair Thompson, EMA's chief executive.

"The ARC is apparently prepared to risk legal action against it for the sake of diverting about $11 on average to residential owners at an average cost to commercial property owners of $367.

"On top the council has also increased the transport rate significantly in urban areas where most businesses are located resulting in a double whammy for business.

"It is abhorrent ethically for an elected council to vote away the property of one group in the community to subsidise another.

"After requesting a meeting with ARC councillors, EMA along with the Chamber of Commerce, Business New Zealand and the NZ Business Roundtable, will be seeking an opinion on the legal validity of the council's resolution.

"Since the Council decision to impose the differential loading was not proposed, nor a rationale for its adoption provided in the Council's plan that went to the public for consultation, it is therefore likely to be in breach of the Local Government Act 2002.

"The council has offered no rationale or justification in its Long Term Community Council Plan for imposing the differential; it only asked the public to say whether they favoured a differential or not. They received 535 submissions opposing the differential and 135 in favour.

"One submission opposing the differential listed over 400 named ratepayers making the total against differentials 935 to 135 in favour.

"The weight of submissions indicated all ratepayer categories should be treated equally, and rated on Capital Value with no differentials.

"This means the council has adopted a proposal it cannot justify nor support in its Long Term Plan as it is required by law to do by a vote of 7 to 6.

"No regional council with a Capital Value rating base has until now imposed a differential penalty rate on business ratepayers.

"ARC's officials and councillors determined last year there was no justification for a business differential. The only thing to change since then is now it's election year."

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