Chamber may back higher commercial tax

The Otago Chamber of Commerce says it could support a rates hike that would result in Dunedin's commercial sector paying more.

Chamber chief executive John Christie yesterday praised the Dunedin City Council's decision to abandon the idea of creating a new targeted rate to help pay for the Forsyth Barr Stadium's events fund.

Instead, deputy mayor Chris Staynes, chairman of the council's rates and funding working party, suggested this week the council could consider increasing the existing tourism and economic development targeted rate as early as next year.

The idea was yet to be formally considered by the council, but, if it proceeded, would result in the city's entire commercial sector paying higher rates.

Funds generated would be tagged for economic development and city promotion initiatives, rather than going into the general funding pool.

Mr Christie told the Otago Daily Times the council's decision to abandon a new targeted rate was a ''very sensible retraction'' by the council.

Those within the business community he had spoken to agreed with Cr Staynes' conclusion the idea was ''unworkable'', because of the difficulty identifying which businesses benefited from the stadium and which did not, Mr Christie said.

''I think common sense has prevailed.''

The chamber generally favoured targeted rates, where those that benefited from a sector or a project helped pay for it, he said.

It also meant the council had to be able to show it had used the money it collected for the intended purpose.

''I see that as a good discipline for council,'' he said.

''I think it's a clever model because you can ring-fence how those funds are going to be used. This isn't about council just collecting more rates. It's collecting it for a specific purpose.

''If you engage with businesses around what that purpose is and what the benefits are, I think businesses will be quite willing to have that discussion with council.''

However, support would also depend on the size of any increase, and businesses continued to face tough economic times and were conscious of any new cost, he said.

''We'd want to be discussing that with council well before it goes out for public consultation.

''I don't think we would want to anticipate large increases in rates for the commercial sector.

''I don't think they would welcome that ... and I don't think council is proposing that yet,'' he said.



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