Tauranga City Council elected members have received a number of communications from businesspeople and commercial and industrial property owners since the first rates invoices for the 2024/25 year were issued in August.
While we had no involvement in the rate setting process, we obviously feel a sense of responsibility and acknowledge that, for many businesses, any increase in rates charges in the current economic climate is far from ideal.
However, we also have to acknowledge that, in many respects, a fairer rating structure was long overdue. The commercial and industrial rating differentials, introduced progressively since 2021, have brought Tauranga more into line with systems that have applied in other major metropolitan centres for many years. In this instance, ‘fairness’ refers to the fact that businesses generally make far greater use of the city’s infrastructure assets, particularly our transport network, than an average residential ratepayer – this disparity in use is even higher for industrial operations.
From the correspondence I’ve received personally, it’s clear that, in some situations, property revaluations have exacerbated the issues commercial and industrial ratepayers face. Simply put, if a property has increased in value by more than the average for the city as a whole, its owners will have a higher than average rates increase. In the case of businesses, the differential multiplier makes the increase even higher.
We understand it will be of little consolation to know the value of a business’s assets has grown, because the reality for most is that their revenue hasn’t, and that’s where rates payments have to come from.
At this stage of the new council’s tenure, we can’t promise any significant rates relief for the business sector. However, the 2025/26 Annual Plan process will give us an opportunity to look at the fairness of the current commercial and industrial differentials again, and any unintended consequences of the changes, in consultation with the business sector and the wider community. This would allow all relevant factors to be taken into consideration, including comparisons with other centres and the sector’s ability to pay based on the prevailing economic climate at the time.
In the meantime, we appreciate the goodwill businesses have brought to the rate setting process and the acknowledgement that the sector will have to contribute more as we work to address a longstanding underinvestment in infrastructure. Until then, there is one promise that council elected members can make – we will be doing our utmost to ensure capital investment focuses on the city’s priority issues and delivers real value for money for all ratepayers.
Right now, the priorities include revitalising the city centre so that it once again becomes the economic, social and cultural hub of the wider region. We will also continue working with central government to deliver the infrastructure required to address Tauranga’s dire housing shortage and transport congestion issues. Getting these jobs done will benefit businesses enormously and we’re relying on the sector’s continuing collaboration as we work to make Tauranga the best city in New Zealand.
Related: Facing Tauranga’s need for change
