Wellington City Council votes 'in principle' to keep same rates for businesses

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Mayor Tory Whanau strongly backed the target on introducing rates for vacant land in the central city. (file image)
Photo: RNZ / Samuel Rillstone

Wellington City Council has voted “in principle” to keep rates the same for businesses, meaning a rates bump for residents might not be as high as expected.

At the Long Term Plan and Finance Committee meeting on Thursday, councillors had to make initial decisions on new rates and changes to its rates remissions policy.

The decision about whether to decrease the commercial rates differential from $3.7 to $3.25 stirred heated debate.

Councillor Tony Randle said businesses outside of the CBD were struggling with high commercial rates.

“If you want to look at the Southern Ward, the average value of a residence there is $1.3 million but the average value of a business there is $1.6m. Yet businesses in the Southern Ward pay an average of $14,700 in rates versus $3600 (for residents). They’re getting slammed and they’re your local businesses.”

While councillor Ray Chung said he could see the argument for both sides, businesses and residents.

“I support the businesses because I know that they’re hurting… but changing the rates doesn’t make any difference to me because the tenant pays for it,” Chung said.

“I’m not comfortable with the residential ratepayers paying more to try and do this. I’m out to reduce the rates for everyone.”

Councillor Ben McNulty argued the new government would ensure businesses were well supported in other ways.

“They’ve said you’re not going to have to pay your staff as much because we’re going to scrap FPAs [Fair Pay Agreements] and they’re not going to increase petrol taxes.

“They’re going to do a lot of practical things that are going to be very good, and probably more meaningful than this, for the business community.”

In the end, the committee voted against the decrease.

Councillors voted yes to all other changes, including introducing rates for vacant land in the central city.

Mayor Tory Whanau strongly backed the target on vacant land and made an amendment to further that differential to $5 in general rates for every $1 that a residential property of the same value pays.

“Targeting vacant land will help creative vibrancy in our city centre by incentivising development,” Whanau said.

“I recently spoke to retailers from Courtenay Place and Cuba Street and there was support for this change. We’ve also had strong support from the public during consultation on this, who asked us to go even further.”

The council also voted to postpone rates for some earthquake-prone residential buildings until seismic strengthening is completed. Those buildings would need to have a body corporate or be one-to-two storeys with a mixed use. The rates postponement would be available for up to three years prior to when the strengthening work is undertaken.

Councillor Iona Pannett welcomed the change.

Councillor Iona Pannett
Photo: RNZ / Samuel Rillstone

“Homeowners and small business owners in quake-prone buildings deserve some financial reprieve as they meet the high costs of strengthening.”

The decisions made on Thursday were made “in principle”, meaning they will be used to inform further work on rates within the council’s 2024-34 Long Term Plan.

Formal consultation on the draft Long-term Plan will take place in April 2024. Once adopted by the council, any rate changes would be implemented from July 2024.