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Keeping quiet about the rates

by Lindsay Shelton
Communications from the Regional Council were weak and incomplete this week. Chris Laidlaw announced that the average rates increase had been brought down from 6.5% to 5.9%. But he chose not to give the full story.

Some of the details were later released on Twitter by Cr Roger Blakeley – we then learnt that the situation for many ratepayers was much worse than the average. It seems the council had been planning an increase of more than 15 per cent for Wellington city ratepayers, but had decided to bring this down to 8.9 per cent. Not something that the chairman wanted to mention in his announcement.

Cr Blakeley then sent us other details that had been omitted from the Regional Council’s announcement. We discovered that Upper Hutt ratepayers will be paying an increase of 6.5%. There’s to be a smaller increase for Hutt City – only 3.7%, and the Porirua increase is only 2.3%. But on the Kapiti Coast the increase will be 9.0%, and Masterton is topping the chart with an increase of 9.3%.

Then there are Wellington’s business rates – the increases will be only 3.8% in the Wellington CBD, and 4.3% for business properties outside the CBD.

How about the rates being set by the Wellington City Council?

On March 8 it announced an average rates increase of 3.9 per cent, without any breakdown of what this will mean for homeowners. At the end of the month, the council confirmed this average increase, with its minutes recording a change in the way rates are calculated – again, without specifying the actual increase for homeowners:

The average rates increase for existing ratepayers in 2019/20 is 3.9 percent. However, the forecast increase varies between each property rating category. All rating units (or part thereof) are classified, for the purposes of general rates, as either ‘Commercial, Industrial and Business’ or ‘Base’(‘base’ includes residential). We currently apply a rates differential for the Commercial, Industrial and Business rating category of 2.8 times the rate per dollar of capital value payable by the Base rating category. The main purpose of applying a rates differential to different categories is to reflect the different ability of groups of ratepayers to pay, and maintain the affordability of rates to all sectors. It is proposed that the general rates differential be adjusted from 2.8:1 to 3.25:1 to ensure the rates for 2019/20 continue to be paid in the same proportion by each differential rating category. In simple terms, this currently means that commercial property owners contribute 44% of total rates revenue in 2018/19 in comparison to ’base’ contributing 56%. Due to the change in the relative Rateable Values (which does not necessarily change the relative ability to pay) changing the general rate differential to 3.25:1 will maintain this ratio at 44% commercial to 56% base.

And more:

With the average proposed rates of 3.9 percent for 2019/20, if the differential was to remain at 2.8:1 the Base category ratepayers would pay 7.95 percent more rates than in 2018/19 while Commercial category ratepayers would pay 1.19 percent less. We are proposing a change to the differential from 2.8:1 to 3.25:1 in 2019/20, to maintain the current balance.

After this decision, the Chamber of Commerce complained about what it said would be a 3.8 per cent increase for city businesses, which was double the rate of inflation.

“We can’t keep increasing rates forever,” said John Milford. An opinion which will be shared by everyone who has to pay the annual rates increases.

But now we need a city councillor to follow the lead of Roger Blakeley and tell us what the city council’s rates increase will be for Wellington homeowners.

4 comments:

  1. Concerned Wellingtonian, 5. April 2019, 9:46

    How much does the Regional Council pay the propagandists who deliberately fail to mention that residential increases in Wellington are three times business rate increases? Why is this happening when so much money is spent simply for “growth” which benefits motels and restaurants etc?

     
  2. michael, 6. April 2019, 9:48

    I just cannot believe the GWRC has secretly extended the CEO’s contract for two years. “Campbell’s ratepayer-funded salary is $430,000 a year – a pay packet similar to that of Prime Minister Jacinda Ardern”. The council was “pleased to extend Mr Campbell’s contract by two years through to 15 September 2021 following a decision made at its meeting of 26 February, after a comprehensive performance review by a council committee.’’
    If this is what we pay $430,000/year for, we are not getting value for money.

     
  3. Guy M, 8. April 2019, 11:39

    Seriously people, we can sit here and bitch and whine, or we can take matters into our own hands and storm the barricades. Regional Wellington are completely incompetent. Why wait till the elections to throw them out ? Why not stage a citizens’ revolt, evict them, and do the job better ourselves. Ceausescu got what was coming to him. Laidlaw and Campbell should get their dues as well.

     
  4. cam5far, 8. April 2019, 12:04

    Concerned Wellingtonian. The business sector pays significantly higher rates than residential ratepayers and if the shops etc are outside the central business area they receive very few or no benefits to justify the additional rates. On top of the rates, many commercial business pay separately for water which is a cost included in the residential rates. Some examples of the commercial v residential rates are:

    Suburban – same building
    Capital value Shop $180,000 – Rates $2,105.73
    Capital value Flat $540,000 – Rates $2,748.32

    Suburban building in a different suburb – Shop with flat above
    Capital Value Shop $405,000 – Rates $4,737.85
    Capital Value Flat $270,000 – Rates $1,449.11

    Suburban building in a different suburb – Shop with flat above
    Capital Value Shop $225,000 – Rates $3,821.16
    Capital Value Flat $390,000 – Rates $2,427.15

    Central city
    Capital Value Shop $1,200,000 – Rates $20,322.05
    Capital Value Flat $540,000 – Rates $2,748.32

    It seems to me that the commercial sector is well and truly paying their fair share of rates considering the services, benefits they receive.