8 December 2021
Media: NZME (Rotorua Daily Post and BOP Times)
Topic: Commercial rates
Enquiry
I am doing a story on commercial rates. In Tauranga they are proposing to put them up as part of the long-term plan as commissioner Anne Tolley said commercial ratepayers have had it too good for too long. In Tauranga commercial rate payers pay a differential of 1.2, meaning they pay $1.20 to every $1 residential ratepayers pay for a property of the same value. The council is considering proposals to raise the commercial differential to 1.6 in 2021/22. There has been a backlash from business owners regarding this as some say it could be the final nail in the coffin.
- What potential commercial rate rises is the RLDC proposing under its draft long-term plan?
- What does this mean and potentially how much will commercial rates go up by?
- Some businesses say this could be the final nail in the Covid coffin, why are rates rises needed?
- How much commercial rates did the council collect in this financial year compared to last financial year?
- As of today - how much debt in the council in compared to 2020 and 2019 - and what has been the biggest contributing factor to this?
- What relief if any - is the council offering to commercial businesses who are struggling to - or can't pay their commercial rates?
Response
The following information was provided:
You referred in your enquiry to Rotorua Lakes Council’s draft long-term plan. Please note that RLC adopted its 2021-31 Long-term Plan in June 2021.
See information about this HERE (news item following adoption of the LTP) and see the LTP HERE.
See information below in response to your questions:
As per the LTP (adopted in June) the business rate (general + targeted) increased by 8.17% for the 2021/22 financial year (we are now halfway through the 2021/22 financial year).
The differential between the general and targeted rate is 1.72%.
Re why rates increases are needed, refer to p6 of the LTP “The rates increases, particularly during the first five years, are being driven by Council’s ongoing commitment to delivering Vision 2030 projects and Council’s key priority areas (housingand thriving communities, safety, economic development, climate change and infrastructure).”
The Long-term Plan will see investment into the district totalling $749 million across the 10 years of the plan.
Re amount in commercial rates collected by RLC this financial year vs last financial year: This financial year isn’t over yet, our financial year finishes at the end of June 2022 but see below the revenue that was forecast for this financial year:
- Forecast revenue from targeted business rate for 2021/22: $6,954,037
- Forecast revenue from business general rate for 2021/22: $10,320,071
Commercial rates revenue collected last financial year (2020/21):
- Revenue from targeted business rate for 2020/21: $6,294,272
- Revenue from business general rate for 2020/21: $9,626,788
Re RLC debt:
- As at October 2021 (most recent data available): $256m
- As at June 2021 (ie end of the 2020/21 financial year): $247m
- As at June 2020 (ie end of the 2019/20 financial year): $228m
- As at June 2019 (ie end of the 2018/19 financial year): $206m
Re rates relief:
Rotorua Lakes Council has a Rates Remissions Policy (see page 150 of the Long Term Plan). This consists of a number of rates relief policies that ratepayers can apply for where applicable.
In 2020, RLC offered a rates deferral scheme to help cushion the impact of COVID-19 on local businesses. While this has now been phased out, as has always been the case, those struggling to pay their rates are welcome to contact Council to discuss their situations and the options available to them at any time.