Darrin Walsh: Past councils to blame for 7pc jump in rates

Darrin Walsh

Last week, Rotorua Lakes Council announced their intended rates increases for our region.

Rotorua ratepayers face the prospect of a 7 per cent average rates increase. The average business rate will increase by 11 per cent while farm rates will hike up on average by 19 per cent. These increases are significant and have caused concern in the farming and business sectors.

The Rotorua economy has been improving during the past six months and business confidence has also been on the rise, however, a significant increase to rates could stem some of this flow. It could also be a disincentive for businesses looking to relocate here and that is a major concern.

A lot has been said as to the reasons behind such a hike in rates. The main player here being a need to balance the books after low and "unrealistic" rate increases over previous years. In 2013, the Rotorua District Council announced the lowest rate rise in recent history - 0.99 per cent increase, 3.5 per cent less than the adopted draft rate announced in the plan a year earlier. The business rate that year decreased on average by 0.9 per cent and a 2.4 per cent increase for farming.

It was also signalled that the council had achieved an average rate increase of 2 per cent over the previous five years well below the prevailing inflation rates. The council also announced they did not intend to cut back on investing in the community nor would they cut the services provided to the community.

In 2014, rates were increased on average by 3 per cent and again was announced as one of the lowest rate increases in the country. We now know these low increases were unsustainable based on the level of investment placed in our city and the amount of debt the council had to service. We are all well aware of the current deficit in budget that the council is endeavouring to rectify.

So in a nutshell we are being asked to accept the incompetence of past councils and pay the significant hike in rates. Is this fair? No, not at all.

But what are the alternatives? Is there another way to "balance the books" that won't threaten the current flow in business confidence? What if we held back on some of the investment planned, cut expenses, did the essential stuff but held back on the "nice to have"? For example, the aquatic centre upgrade could this be held over a year or two and reduce the need to hike rates up so much?

The Chamber of Commerce would like your views on this prior to submission date. Email ceo@rotoruachamber.co.nz.