Time to reconsider rates discount

Rotorua District Council's attempt at conjuring up a rates "discount" for some business properties has fallen over - and rightly so.

It is expected to resurrect the proposal at its meeting tonight.

The integrity and legality of the process was always suspect. It failed on the grounds it needs a special consultative process that will take at least two or three months.

Rather than simply commence a formal process, the council might wisely reconsider whether this is the most sensible route to take. It might be smarter to drop the proposal and give its energy to reviewing differentials for next year.

As previously reported, almost everything about the proposed remission policy is bad. Apart from failing on tax and equity principles, it gives a financial benefit to a select few rather than serving a policy of benefit to the community as a whole.

All apart from about 57 ratepayers would have every right to object. One way or another, all other ratepayers will sooner or later have to subsidise this "gift" of about $340,000 to a small number of businesses. If it is to be funded out of savings, all other ratepayers are entitled to their share of those savings.

It seems fairly clear some businesses, supported by the Chamber of Commerce, are trying to hold the chief executive and some councillors to ransom, pressuring as they are for these "special concessions".

This is not to say there is not concern for the size of some of the increases. There clearly is. Nevertheless, the change to capital value shows some ratepayers were not paying their fair share under the land value system. The chamber's job is to look after the interests of its members, and that means all of them. Even so, its influence seems to be out of proportion. It argued the case for City Safe Guardians, at a cost of about $200,000 per year, with a petition signed by about 300 retailers promising support, of which about 15 eventually fronted up. It also put down a scrum for the $2.9 million economic development project. And now it wants all ratepayers, apart from about 57 businesses, to pay for this discount. Is this fair?

- Jack Shallard is a Rotorua accountant and business consultant with experience in tax and rating systems.