Media Release Wednesday, June 6th, 2001

Hamilton City planning to boost rates, and debt

Hamilton City Council is planning to boost its rates by nearly double the inflation rate each year for the next three years, on top of debt that has doubled over the past three years, the Employers & Manufacturers Association pointed out in its submission on the Council's Draft Annual Plan today.

"What is of concern is that, in addition to Hamilton already having very high rates relative to elsewhere in New Zealand, businesses pay 2.2 times more in rates for equivalent property values than residences do," Alasdair Thompson, EMA's chief executive, told the Council hearing.

"Hamilton's residential ratepayers represent 90 per cent of property owners and hold 75 per cent of the city's land value yet pay just 66 per cent of it's the city's income from rates.

"The average residential property owner pays $1673 in rates for every $100,000 of land value.

"Businesses pay over twice as much; $3663 for every $100,000 of land value. They pay 31 per cent of the Council's income from rates though representing only eight per cent of property owners with 16 per cent of the land value. "The 500 businesses in Hamilton that are members of EMA employ nearly 18,000 people and provide 35 per cent of the total jobs in the city, with a pay roll in aggregate of $680 million a year.

"Council mistakenly presumes businesses can better afford to pay rates - this is not the case. The differential against business acts as a disincentive for businesses to locate in Hamilton and employ more people.

"Hamilton City Council is tying up rate payers' equity in assets of Council's choosing and control at a significant opportunity cost in jobs and growth for businesses and residents of the city.

"In its submission EMA recommended the Hamilton Council should use Uniform Annual General Charges (UAGC's) far more, that it should remove the term 'tax benefit adjustment for commercial/industrial' from its plan as it used incorrectly, and should sell non-core assets and get out of non-core activities."

Further comment: Alasdair Thompson tel 09 367 0911 (b) 09 303 3951 (h) 025 982 024

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