Councillors looking to punish business

2 March 2016

Transport Levy increase proposal – Councillors looking to punish business hoping residents will vote for them!

Councillors have put up a proposal within their 2016/17 annual plan to increase the interim transport levy business is paying from $183 per year to $3001 for a business with a capital value of $10 million.

For a business with a capital value of $180 million the levy will increase to around $48,000.

“This is outrageous. It clearly demonstrates councillors lack of knowledge of the contribution business makes to the city. The fact is that infrastructure is as important to business as it is to residents needing goods and services, roads for connecting people to work and play and for general connectedness of communities,” said Auckland Chamber CEO Michael Barnett.

The interim levy was introduced last year to raise $523 million over a period of three years. It was set at a fixed amount of $183 for business ratepayers and $114 for all other ratepayers. The proposal is to increase the share to be met by business for the remaining two years from 15% to 33% for 2016/2017 and then up to 32% for 2017/2018, and switch to a capital value basis rather than a fixed charge.

This proposal is inconsistent with the overall trend to align the rates differential between residential and businesses (albeit very slowly), and the Council’s objective of cultivating business investment. “It has nothing to do with transport.”

The proposal is changing the rules midway through the 3-year interim period without any justifying evidence. The interim transport levy was developed to tide Auckland over while a more permanent arrangement for funding Auckland’s transport was worked out jointly with central government. This work is underway and is scheduled to be completed this year.

It’s a proposal that business need to be aware of and object to says Mr Barnett. It perpetuates the argument some Councillors have suggesting business should pay significantly higher rates because they are businesses – an argument that has been refuted in the past by economists and academia.

“Messages have begun pouring in to the Chamber from manufacturing, retail, transport and associated sectors all suggesting this needs to be opposed.”

“Changing the interim at this time will only add to the discontent with Council’s performance. Councillors should stay with the current arrangements for the three years,” concluded Mr Barnett.

ends

© Scoop Media