Questions over massive rates hike

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Council finances – and ratepayers’ wallets – will take two big hits in the next few years.

While ratepayers enjoyed a rates freeze last year, the council’s long-term budget is for an average 2.6 per cent increase per year, down from 4 per cent in the 2012 plan. 

At yesterday’s full council meeting Queenstown mayor Vanessa van Uden laid out the culprits for the coming rises – the controversial $55 million convention centre and a $27.8 million upgrade of the Wakatipu sewer system.

Van Uden says the council wants constructive submissions not “emotional responses” to its 10-year plan.

Questions are already being asked by central Queenstown businesses, which face rates hikes of more than 30 per cent to pay for those two huge projects.

Such significant hikes – albeit for a short time – have fuelled further calls for a bed tax in the resort.

Wakatipu residents will pay $51 each for the convention centre while Wanaka ratepayers will each be stung for $13.

However, the hardest-hit to pay for the two big-ticket items are businesses and accommodation providers in the resort’s central business district.

A high-value CBD business already paying $97,489 this year would pay $33,739 more – a hike of 34.6 per cent - and a high-value accommodation business paying $257,620 would pay an extra $79,339, a 30.8 per cent rise.

Bar owner Mike Burgess says it’s a significant rates hike and he questions why ratepayers have to pay the lion’s share of convention centre costs.

“I’m in favour of the convention centre – I think it’s exactly what the town needs. It has to be paid for somehow, but perhaps there are alternative funding models to look at, something similar to a bed tax which has been bantered around for a number of years.

“At some stage we’ve got to look at how the rating base of our community can support an infrastructure that provides for more than two million tourists a year.”

Queenstown Chamber of Commerce president Charlie Phillips didn’t want to comment on the rates figures but says: “It’s not harmful to seek out alternative means of funding.”

Outside Sports owner John Knight says the hike is fairly steep.

He asks why the council is pushing its own convention centre when Frankton developer Remarkables Park is intent on building its own convention centre, at no cost to ratepayers.

Tourism Industry Association hotel sector regional chairwoman Penny Clark says the town has to upgrade its sewerage system to protect the environment – and businesses will have to hike prices to pay for it.

“This town needs to get its act together. We’ve had all these meetings to make sure we look after our environment, look after our economy. Well, guess what? It costs money. So we’re just going to have to accept it.”

Otago Daily Times