Hamilton City Council is bringing down the difference between the rates paid by the city's businesses and its homeowners but the Employers and Manufacturers Association (EMA) are calling for all councils to phase the differential out.Under the Hamilton Ci
Hamilton City Council is bringing down the difference between the rates paid by the city’s businesses and its homeowners but the Employers and Manufacturers Association (EMA) are calling for all councils to phase the differential out.
Under the Hamilton City Council’s draft annual plan the rates paid by businesses are being cut from 2.27 times more than for residential properties of the same value, to 2.05 times.
The difference between residential and business rates varies for councils around the country, with some charging the same rates for both, while the largest difference is on Auckland’s North Shore where businesses need to pay more than six times the homeowner’s bill.
Speaking on behalf of EMA Waikato at the Hamilton council’s annual plan hearing today, EMA executive office Peter Atkinson said the reduction was a move in the right direction, but was “simply not good enough.”
He said rates for business and residential properties should be the same as businesses used the same or fewer council-funded services than households.
“Just because you are a business doesn’t not mean you use more street lighting, roads or footpaths, and certainly not libraries, parks, theatres of museums.”
Mr Atkinson told NBR the differential varied from year to year in different areas around the country and the Hamilton difference was in the middle of the range.
He said the EMA’s two main objections to the difference were the unfair nature of it and the manner in which the councils set the rates.
“Under the Local Government Act, they are supposed to show that the higher rates deliver benefits to that sector paying them, but there has been very little evaluation of those benefits in recent years.
“The North Shore Council did do it several years ago, but generally it just isn’t done. Essentially, they just use the business rates to make up any deficits in the overall rates take.”
The EMA are pushing for all councils to drop the difference between rates, but Mr Atkinson conceded that the organisation did not expect change to happen overnight.
“We can’t expect them to go from a difference of six times the residential rate to zero in one year, but they can be phased out incrementally. The Tauranga and Manukau councils have done it and Auckland is in the process of scrapping that difference, although it is taking a lot of time and could all change when the supercity is formed.
“But it can be done and councils that are serious about helping businesses create jobs and stimulate local economies need to consider this.”
