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Making our rates system fairer

News - making our rates system fairer

The Council’s City Direction Committee agreed today to seek public input into two significant policies as we start thinking about next year’s Long-term Plan.

Committee Chair ‘Ana Coffey says the Revenue and Financing Policy and the Rating Policy will impact how rates are set in the Long-term Plan.

The Rating Policy aims to achieve a fair and equitable distribution of rates across the city, she said.

“It’s about balancing how rates are allocated so they are fair among our different customers in the city. The proposal is to change the balance to make a fairer distribution between business, residential and rural ratepayers.”

Council Chief Financial Officer and Corporate Services General Manager Roy Baker said the proposed Rating Policy helps Council get as close as possible to making sure each customer group makes a fair contribution to the costs of the services and benefits they receive or have access to. “The first proposal is to change the method for calculating business rates although, in what’s proposed, business won’t be paying any more than they do now. 

The second proposal is to equalise the shopping plaza rates with the rest of the business sector. “North City Shopping Centre has been paying a lower rate for 18 years and the Megacentre shops have also enjoyed the same discount since they were constructed around 2000. We propose smoothing that out.”

The final key proposal in the draft policy is to increase the proportion of rates that are paid by the rural sector. This is to cover increasing costs to maintain and do major repairs on rural roads following the increase in wet weather events.

The committee recommended equalising the shopping plaza rates with the business sector bit by bit over three years to soften the impact. 

Mayor Mike Tana said the proposed Revenue and Financing Policy is important.

“It guides who pays for which services and what share of those costs people pay,” he said.

This sets how much of our services are paid for by rates and how much by fees and charges. The theory is that the ‘public good’ part of a service is paid for by general rates and the ‘private benefit’ is paid for by fees and charges and targeted rates,” he said. 

“For example 95% of the library service is paid for by rates. It’s a ‘public good’ that we have libraries in our community to help people in their search for knowledge, and to support learning, literacy and recreational reading in the city. The other 5% is paid for by people who use some of the added value services we offer such as the public internet PCs, photocopying, scanning and overdue library book fines.”

“Please take the time to tell us your thoughts. It’s important we get this right as we head toward our next Long-term Plan which sets the budget for our city over the next 20 years.”

28 Sep 2017