Lobby group says cutting Wellington's commercial rates differential is not the answer

A lobby group says cutting Wellington's commercial rates differential won't solve the underlying problem of high rates.

James Ross from the Wellington Ratepayers' Alliance said lowering the differential without reducing overall council spending would simply shift costs onto households.

"Walk around and you can see that Wellington is clearly a city that's being choked to death by its rate bills and the commercial differential does play a serious part in that. Wellington has the single highest commercial rates bills in the country," he said.

"However, I think the real crux of the issue is just the size of those rates bills writ large. Wellington City Council has had a bit of a habit of ramping up those commercial rates and pretending they're free.The reality is all of that has a cost. So, when councillors are talking about, you know, fiddling around the edges of the commercial differential, really what they actually need to be focusing on is cutting the rates bills overall."

Ross said the capital needed a government imposed rates cap to limit future increases.

"You know, there's still significant growth in rates, but still significant growth in spending. Frankly, we need to see those sort of systemic changes that will reign in spending at Wellington City Council. I'm just not too optimistic that they'll do it themselves without central government intervention through a rates cap," he said.

Meanwhile, Wellington's Deputy Mayor said the capital's economy was stagnating and that's changed his views on commercial rates.

Ben McNulty opposed similar moves in 2023 due to the cost of living implications for residential ratepayers.

But, he said stalled development, weak business confidence and public sector job cuts meant the council needed to find ways to attract investment and create jobs.

"I think people see that Wellington is stagnating and they know that something has to change in how its current performance is and that there's little confidence given by the government's announcements about what they want to do by AI-ing the public sector and the like. So I think people are receptive to the need that there might have to be a change here, but people need to see those hard numbers."

McNulty said any reduction to commercial rates would be picked up by residents, so it ws critical the council had its finances in order before making any change.