Skip to Content »

So why would Wellington businesses want to subsidise more ratepayers?

  • May 8th, 2015

John Milford of the Wellington Employers’ Chamber of Commerce criticises the rates intentions in Wellington City Council’s long term plan. It all looks sensible, but for one great puzzle.

It collides head on with the Chamber’s fervid support for amalgamation to add Porirua’s ratepayers to the subsidised householders already bludging off  Wellington’s businesses.

Here is how the Chamber explains the problem:

“….Wellington City businesses – commercial ratepayers – in total own 21% of Wellington City’s rateable properties but pay 46% of the rates. …We believe the Council’s rates increase is too high, it’s higher than both CPI and LGCI. When you compare the rates collected in the year 2014/15 to the amount projected to be collected in the year 2024/25, it is an increase of 61.28% or nearly $148 million.”

Interestingly it does not go on to call for less cross-subsidisation. But it does observe:

“Of this increase just 80% is for ‘business as usual’ and in addition the plan is to increase total debt by 101%. The Council argues there’s a need for a greater increase in rates to fund ‘invest to grow’ projects. … This ‘increase’ must be ring-fenced to only those big ideas – not base lined for other activities or councillor’s pet projects. And the project’s got to stack up – robust business case, cost benefit analysis, return on investment… “

This proper concern contradicts the Chamber’s faith in amalgamation because:

a) the LGC has purported to justify amalgamations (across the country – not just Wellington) on the grounds that ‘demographic’ [read poverty] problems can only be dealt with by locking rich communities with poor ones, so the poor ones get services they are not expected to be able to pay for.

b) Porirua enthusiasts have made no secret of their reasons – they want a share of the golden eggs they see as being laid by the ‘high rises’ in Wellington.

c) The serious embarassment for the LGC in the resolute rejection of amalgamation by Wairarapa, after the LGC said Wairarapa was not ‘viable’ on its own, without a subsidy stream it says is worth up to $11m per year. The law makes if very hard for the LGC to come out now with a revised scheme leaving Wairarapa without the subsidy, if it is in fact ‘not viable’.

Truth is, all communities should cut their coats according to their cloth. As Selwyn showed Christchurch the less rich can find ways to enjoy services more efficiently. As the Wairarapa has sensed there is more satisfaction in that than in begging for crumbs from their patronising richer neighbours.


  • Barton
  • May 12th, 2015
  • 9:49 pm

We know GWRC can’t run forests, they sold them and the annual debt to Wairarapa drops by $3m. They can’t run Finance Companies. They can’t run a Port, they built a building that after a small quake is a right off. And these people want to run the entire region?
The LGC should have got in the Auditors to confirm the shortfall, Was it $2m or $12m. How could any reasonable person proceed.

Leave your comments:

* Required fields. Your e-mail address will not be published on this site

You can use the following HTML tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>