Whangarei District Council reviews $88 million rate take calculation

The Whangarei District Council is reviewing who pays what into its $88 million rates pool. Photo / File

To those people fortunate to own property then paying council rates is going to be an unavoidable fact of life.

For those that do not own property but rent then they also will contribute indirectly to this source of council revenue.

For this reason Whangarei District Council's recent announcement of a major review of the way property owners' shares of council's $88 million annual rate take are calculated should be of interest to anyone who is fortunate enough to have a roof over their head.

The review is about how different parts of the community pay pieces of the rates income, not how much money the council needs to collect.

It will be assessed against the broad principles of equity, affordability, simplicity, transparency, stability, adequacy, comparability and efficiency of our system. Individuals will be influenced by their own personal circumstances plus their overall world view and value set.

At times within the business community there is a sense that council has a perception that is based on a false belief that businesses somehow make a greater demand on council services than other ratepayer groups.

There is no evidence for this view as the findings of the 2007 Funding Local Government - Report of the Local Government Rates Inquiry clearly demonstrated.

There is also a sense that there is a false assumption business has a higher ability to pay, so should pay more.

Whatever the case, there are elements of the existing rating policy of this council, and many others, that are no longer fit for purpose within today's business environment.

Businesses do not behave in the same way today as they did 20 years ago. For example the way they occupy buildings is vastly different.

Many businesses today occupy smaller spaces, shared spaces, spaces for shorter times and generally use them in a much more flexible manner.

The outcome of this changed behaviour means that a mechanism such as SUIPs (Separately Used or Inhabited Part) is manifestly inequitable, unaffordable, complex and not transparent.

There are very few conversations that take place concerning councils where the subject of rates does not come up.

By undertaking this comprehensive review at the very least the council will be in a position to say it has considered the matter in detail and come up with the least imperfect system.

But having said that, any time you ask a question where you do not know the answer, you might get an answer which is not the one you want.

* Tony Collins is the Northland Chamber of Commerce's chief executive