The Tauranga City Council has been accused of being ''airy-fairy'' with its explanation of why businesses should be paying a bigger share of city rates.

The accusation was levelled after council chief executive Garry Poole and chief financial officer Paul Davidson had completed their presentation to a meeting of the Tauranga Chamber of Commerce.

Nelson Tkatch of eSuccess Strategies said what mattered was what the council would do with the extra money it received from the commercial sector.

He said the presentation contained no compelling results of how businesses would benefit from paying more.


''It came across as airy-fairy,'' he said at yesterday's meeting to hear why the council proposed to introduce a commercial rate differential.

The change would be phased in over three years. Instead of commercial ratepayers paying 14 per cent of the total general rate, as they do now, they would end up paying 22 per cent. Businesses that now paid the same rate in the dollar as householders would pay 60 per cent more.

Poole responded that the council had invested in the tidal steps that transformed the waterfront, contributed to the Bay Oval lights and spent $100,000 on the Paradox Festival.

He said the council wanted to make Tauranga a better place to live. ''The CBD is our premier space.''

Mayor Greg Brownless said a 1.6 differential was the lowest in New Zealand. The average was 2.3 and the highest was Wellington's 2.8 differential.

The presentation described the current rating system as regressive, inequitable and ''overly constrained by affordability''. The proposal would rebalance who paid for the investment in Tauranga.

Tauranga Mainstreet chairman Brian Berry accepted the city was going through growing pains but said CBD retailers were being smashed in all directions.

If retailers were unable to pass on the higher costs into higher prices the only option was less profit. Reduced profit margins meant they might go out of business or relocate.


Poole said the council's project team was working closely with people generating change in the downtown including Farmers and the developers of the former Westpac site at the bottom of Devonport Rd.

He said they were concerned about how to keep the area functioning while the Westpac building was demolished. A 12-storey downtown Wellington building had been brought down in one week.

On the issue of the council finding new ways to raise money other than the ''blunt instrument'' of rates, Poole said the Government was having another look at recommendations in the shelved Shand Report and he and Davidson had met with Treasury officials in Auckland.

Chamber chief executive Stan Gregec said after the meeting that business people were not opposed to paying their fair share but if support had been enlisted much earlier in the process, other options may have been identified and all sections of the community would have been better prepared.

''That would seem to us to have been a much stronger basis of consultation than the seemingly predetermined outcome the council is now trying to sell to a sceptical business community."

Impact of Tauranga City Council rates changes on commercial ratepayers
- 285 properties (8 per cent) pay less rates than now.
- 972 properties (29 per cent) pay more.
- 1816 properties (54 per cent) would pay up to an extra $20 a week.
- 59 properties (top 2 per cent) would pay one-third of the total increase in commercial rates.


Proposed rate rises in the CBD over the next three years
$915,000 property: 38 per cent increase
$4 million property: 56 per cent increase
$10 million property: 71 per cent increase
Source: Brian Berry of Mainstreet Tauranga