Rates recommendation on differentials welcomed

Media release
28 August 2007

Rates recommendation on differentials welcomed

New Zealand businesses will take heart from a key recommendation by the Local Government Rates Inquiry, says Business NZ economist John Pask.

The Inquiry Panel has recommended the removal of the business differential, on fairness and transparency grounds.

Mr Pask says removing differential rates was a key recommendation in Business NZ’s submission to the inquiry.

“Currently businesses pay around 50% of all rates paid in New Zealand. This is a huge burden on a small sector of the population.

“Businesses pay enormously higher rates than other ratepayers yet receive services in many cases less than other categories of ratepayers.

“The practice of councils using local businesses as cash cows does not help businesses and communities to prosper.

“Small and start-up businesses in particular would have much to gain from this recommendation being implemented.

“We hope that the benefits from removing differentials would not be nullified by any changes resulting from other recommendations by the panel regarding more targeted rates, as these should be used only where a clearly identified community receives additional benefits than other groups.

“Business NZ will consider carefully the raft of other recommendations contained in the panel’s inquiry.”

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