The Government is to be congratulated for its responsiveness to industry concerns over 'room taxes' in the Local Government (Rating) Bill. A select committee had recommended that councils be given the power to levy hotels and motels based on room numbers regardless of occupancy. Implementing such a power would have caused severe economic stress to the accommodation sector.

Business NZ Chief Executive Simon Carlaw says moves by the Ministers of Tourism and Local Government to quash the recommendation are sensible and pragmatic.

"There are a number of other difficulties both with the Local Government Bill and the Local Government (Rating Bill) that are also crying out for a sensible and pragmatic response," Mr Carlaw said.

"These two Bills promote changes in policy direction that will make local bodies less accountable and efficient, will cause rates to rise, and will disadvantage small businesses. They include measures that will:

* give broad powers of general competence to councils so they can engage - at ratepayers' expense - in activities that would be better carried out by central government or the private or voluntary sectors
* make it less important for council controlled organisations to operate as successful businesses and less important for them to use objective output-based measures of accountability
* make it easier for councils to strike rates differentials, putting a greater financial burden on small businesses
* discourage outsourcing, which will lead to less efficient council operations and fewer opportunities for small local businesses
* deny the right to vote if the owner of a business lives outside the region (i.e. the owner must pay the rates but will not get a vote)

"Business has been very clear about the problems these two Bills will cause, in its representation to policy makers, and would like these problems rectified as well as the 'room tax' issue."

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