Friday, March 12, 2010

5.8 percent Rate increase to Wellington's homeowners and zero to commercial buildings

Actually the rate increase is closer to 6.5 percent to the residents if you take into account the swimming pool improvements proposed as an option in the DAP (Draft Annual Plan.) The total rate increase including the commercial and residential sector is quoted as 2.8 percent but when the sectors are broken down the commercial is zero and the residential is 6 percent or 6.5 percent depending on the final fix in the DAP.

The zero increase to commercial is a consequence of residents paying a greater share of the rates. This is happening because the rating differential has been moving in favour of the commercial sector. That is a political decision that began in 2000 and will continue to 2011 unless the political direction changes with a new Mayor. The shift has been huge, starting with a general rate of 7:1 commercial with a target of 2.8 by 2011. That’s a wealth transfer from the residents to business. Along the way, myself and three other councillors have voted against this. At the Strategy and Policy meeting on the DAP last week, the differential was opposed again by me and Councillors Cook, Gill and Ritchie. The rest of the council fell in line with the Mayor’s policy but she is strongly supported on this issue by Cr Foster. Every year he talks about business subsidising the residents. Again that is a political position.

Given that business can pass on its rates and deduct them, one can argue that in fact business actually doesn’t pay rates. Furthermore, business is making all the major decisions and not democratic majorities. The council is stacked with captured right-leaning councillors who are willing to do the bidding of big business and sectional groups.

There are many people who come to the city each day to work and visit as tourists who used to be part of the overheads of business but are now being subsidised by the residents who cannot pass on overheads like business.

Councillor Bryan Pepperell


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