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Targeted rate still unfair

May 8, 2017 Business News No Comments Email Email

Mayor Phil Goff’s review of the Auckland targeted rate on properties providing commercial accommodation has only succeeded in making the proposal even more inequitable, Tourism Industry Aotearoa says.

The original proposal was for 330 properties to pay $27.8m in a new targeted rate, replacing funding of ATEED that currently comes from general rates. This was an average rates rise of 150%, with some properties facing increases of more than 300%.

The revised proposal, announced without any consultation with the affected parties, is a complex array of different rates for different accommodation types and different locations within the city. A partial rates remission for strata title holders with long term leases is part of the proposal.

Holiday parks, several of which the Council owns, backpackers and hostels are now completely excluded.

TIA Chief Executive Chris Roberts says the original proposal was poorly designed but the revision makes even less sense.

“Holiday parks, backpackers and hostels now escape the rate. This is a huge relief for these property owners, who were facing unjustifiable rate increases of up to 400%, which would have put some of them out of business. However, the burden placed on the remaining properties is still unfair.

“A backpackers in Queen St won’t pay the rate but the hotel next door will. There is no logic behind that.

“Hotels are to get a 35% ‘discount’ in the first year, but with the prospect of that being removed after that.

“As we have already pointed out on numerous occasions, commercial accommodation providers receive just 9% of visitor spend in the Auckland region. They are willing to pay their fair share to support the work ATEED does to grow the visitor economy for the benefit of Auckland and Aucklanders. But there is nothing fair about this revised proposal.”

Mr Roberts says the limited information provided on the revised proposal raises a lot of questions. For example, it is not clear whether ATEED’s budget is being cut.

“We have always supported the work ATEED does, because it is good for the entire city.”

TIA and the commercial accommodation sector are very disappointed that the revision has been announced without any consultation.

“If the Council wants to come up with a sustainable funding position, for the long term benefit of Auckland, it needs to include those being asked to contribute in the design of that scheme,” Mr Roberts says.

TIA and the commercial accommodation sector will continue to strongly oppose and challenge the new targeted rate proposal.

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