Rethink of business rate urged

By WAYNE THOMPSON

Some Auckland Regional Council members want the council to prove business ratepayers get extra benefits that warrant their paying 50 per cent more rates than home owners.

Their call comes as new figures show the full impact of the council's introduction of a 1.5 times business differential for this year.

It means rate rises of 42 per cent for 16,000 Auckland business properties and rises from 43 per cent to 59 per cent for 4500 on the North Shore.

Catherine Harland said the council, in striking the new rate on Monday, implied its decision was based on an assessment of the beneficiaries of council services.

But while some councillors may have worked it out "on the back of an envelope", she said the council had not made an assessment in a systematic way as under the Local Government Act.

"It should have been done before - not after the event."

The business differential was decided by one vote on May 28 in an attempt to reduce 2004-05 rates for residential properties, which had a big hike last year.

Ms Harland supported fellow Auckland representative on the council Michael Barnett in his call on Monday for a report that would establish what the additional benefits were over and above the controversial capital value rating system which the council brought in last year.

Mr Barnett said that last year the council acknowledged that a capital value system meant businesses paid three and a half times more than residents.

Now it was trying to justify adding a 1.5 times differential by stating business received clear advantages without facts to back it.

Mike Lee also supported the call of Mr Barnett, who is chief executive of the Auckland Chamber of Commerce. But Mr Lee said he did so because he was confident that further work would confirm that businesses received an advantage.

"The more information the better the public is served," he said.

The business differential restored the business rates take to something like the situation before the differential was removed last year - 23.7 per cent of total rates.

He and fellow councillors Sandra Coney and Paul Walbran had estimated some 30 per cent of ARC costs were generated by business and believed that business should pay its share.

The council said 93 per cent of businesses face increases of between 11 per cent and 59 per cent.

ARC chairwoman Gwen Bull said 86 per cent, or 395,000 ratepayers, would get a rates reduction this year, thanks to an average rates increase of 1.9 per cent across the region and the new business differential.

She was confident the council had addressed many of the concerns raised by ratepayers.

But rating policy changes have thrown up some remarkable increases.

For example, 120 business ratepayers in Papakura have a rates rise of 126 per cent because of what council staff call the "triple effect".

This combines the impact of the business differential, a recent revaluation of Papakura property and the council drawing the properties into an area which pays a higher transport rate pegged to the level of train and bus services.

Another factor in rates increases, particularly for rural areas, was the decision to have 20 per cent of the transport rate requirement come from the general rate - up from 12 per cent last year.

Transport rates resulted in a 29 per cent increase for 2230 homes in the booming new North Shore subdivisions of Greenhithe and Albany.