The following is released in response to questions from the Kapiti News…
One of the risks to Kapiti businesses of a new Council structure in the Wellington region is differential rating.
The Kapiti Chamber has been aware of this possibility for some time and it was a topic at last year’s national conference of Chambers of Commerce as it is contentious and exists in several areas around the country. Often it means that business pays rates to Council that are three or four times more than a residential property owner would pay. Wellington City in the past had a differential that was 8:1 or 7:1, although this has been lowering.
Here in Kapiti the forerunner to the Chamber, Kapiti Business Inc, discussed this extensively with Council several years ago and Council wisely decided that Kapiti would not have differential rating. Our concern at the time was that we were trying to encourage business growth in Kapiti that would lead to job growth and a spreading of the rating base. The Act under which rates can be set has a legal requirement that rates are justifiable and part of the argument for lowering the
differential was that businesses do NOT use more services so paying more is not justifiable.
Businesses go where it is easy and simple, and where they can get an advantage – and cost is always a key factor. The lack of a differential rate on business is one of the biggest selling points we have in our favour when trying to get businesses to see the advantages of coming to Kapiti. As a community, we really don’t want to lose it if we want more jobs here.
Overall it needs to be well thought through yet our obvious concern is that in an amalgamation with the wider Wellington region, that Kapiti may have differential rates imposed on it. In an area of predominantly smaller businesses, this could hit many, lowering the attractiveness of the area for new employers, and flowing through into downward pressure on local wages and business sustainability. The business scene in Kapiti is not like it is in the Wellington or Hutt CBD or industrial areas and in Kapiti the additional revenue raised would not offset the cost to the community of the extra tax.
Contact / Authoriser details:
Mark Ternent
Best phone for Press contact or follow-up 029 904 2600
Email [email protected]
Chamber Contact Details
Kapiti Chamber of Commerce Inc.
PO Box 510
Paraparaumu 5032