Over the past month I have talked about Whangarei District Council’s rates increases.  Not a lot of people truly understand what effect increasing rates has on businesses within our district.

When Council sits down and decide on the direction of the district, it already has an idea of what it wants to spend money on and how much it wants to increase the rates by. When the public make submissions during the Long Term and Annual plans, Council has the opportunity to increase or decrease rates accordingly.  However rare it might be, Council sometimes chooses to decrease rates.

This year the council chose to increase residential rates by 9% on average, however changes and effects to commercial businesses has meant a rates increase of between 10-300% for some properties.  The Council, in its wisdom, has decided that for all the wants of the community and councillors, the business people will be the ones paying.

Here’s an example of a change: Let’s say one property has three tenants in it, and they all share common toilets and kitchen. They are now all individually paying a single rating unit plus other council charges. In some cases this means the property’s buildings rates have changed from $9,000 per year to now $16,000 per year.

Who ends up paying?  In most cases businesses have two options: charge their customers more, or shut up shop.  For property owners, they must wear the cost increases or sell.  So what happens to our CBD?  Unfortunately, what happens is our CBD dies and businesses that are trying to work together end up shutting their doors. This in turn means more and more people will move to big box development and we’ll witness the death of the small business right in front of us.

WDC last week met with all submitters to their Long Term Plan about council rates increases. In this meeting, the council refused to back down, saying this year’s rates have already been set so they will not do anything about it.  This once again proves that our council does not care about the 70% of mum and dad small business owners in Whangarei.

I love this town, but the council’s new CEO has a very hard job ahead of him if he hopes to turn this ship around.