Ian Cassels: Director of The Wellington Company on the impact of increased rates on businesses

Wellington City Council is being called on to review its rating system over fears increased rates are driving businesses out of the capital.

Newly released figures show Wellington’s average commercial rates bill is $47,881. That compares to $20,716 in Auckland, $18,059 in Christchurch, $24,768 in Hamilton, and $25,670 in Tauranga.

Director of The Wellington Company, Ian Cassels, says there's a lot of overspending going on - with 'eye-watering' levies impacting businesses.

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Episode Transcript

Speaker 1 (00:09):
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Speaker 2 (00:17):
It's always trouble in Wellington, isn't it? And this time
there are fears that businesses are being driven out of
Wellington over high rates. The average commercial rates bill in
the capitol has reached forty eight thousand dollars a year now.
That's almost double what it is in Auckland and Auckland
it's about twenty seven it's actually twenty seven thousand dollars
more than Auckland.

Speaker 3 (00:33):
Rather.

Speaker 2 (00:34):
Ian Castle's is the director of the Wellington Company, which
is one of the city's largest commercial property developers. Who's
with us now, hey En.

Speaker 3 (00:41):
Good evening, Keva, how are you.

Speaker 2 (00:42):
I'm very well, thank you. So how do you feel
about this? This can't be making it easy to do
business in Wellington at all now.

Speaker 3 (00:49):
It's an ongoing story. Really, It's like I was speaking
to someone before. If you keep on getting money out
of the cash machine and it's broken, then you just
keep you keep on going back. So that's why it's
been for one commercial owners for years now.

Speaker 2 (01:02):
So the problem seems so is the problem as simple
as this, that the commercial guys are bearing are basically
carrying a disproportioned amount of the rating burden, and then
the residential guys are paying less than they should.

Speaker 3 (01:15):
I don't know if that's right. I think there's definitely
a lot of over spending going on. The best way
to look at it really is that we're an exactly
similar building. Commercial pays maybe five times more than residential
because there's a lot of other fees and levees attached

(01:36):
to the commercial rate apart from the three point seven
times differential, which is downtown levy, sewage and targeted water
rates and in the transport levy at the regional council
levees which is eye watering. So you've got to pay
to bring people into town when they're working from home,
and you've got to give them parties when they don't exist.

(01:57):
So all of that falls upon some pull baskets with
an empty building.

Speaker 2 (02:01):
So are you saying it's not just the differential. It's
the differential, but then it's also all the levees that
are added on top of that.

Speaker 3 (02:07):
Yes, it's like a big it's a big taking machine.
Like it's just and then when they talk about Wellington
being forty eight percent of the Warington businesspout percent of
the city's rates. The city is all the suburbs and
all the pipes and a whole lot of things, Like
the city itself doesn't cost anything like the rates that
are levied upon the city's buildings. It's seen as the

(02:28):
great provider, and you know, in the past it may
will have been, but it just can't keep on doing that.
They can't pay. I mean, some b and seafat buildings
they're paying half of their income and insurance and rates,
and the ones that's having been the income as all
their number is just paying a whopping great pot of
money for the privilege of having an empty building in Wellington.

Speaker 2 (02:51):
What's the fix is? I mean the obvious what some
people will say to you is the fix is that
residential has to carry a bigger burden and commercial less.
Is that the fix or is it actually just to
trim the council spending right back?

Speaker 3 (03:03):
You know, you've got to spend according to what you can.
I mean, you've got to do the best you can
with what you've got, and really you can't keep on
spending at the rate that we are. And this is.

Speaker 2 (03:13):
Obvious to voters because you people keep on electing real
weirdos and apparently Ian, I've heard that the next lot
coming in, according to the numbers, are even worse than
the current lot.

Speaker 3 (03:25):
That's a strange thing to hear. Well, I don't know.
I mean, we can't comment on that right now until
after the elections.

Speaker 2 (03:31):
But I mean, how is this is what I'm hearing?
And it's not as if you've had one or two
council elections where you've had weirdos elected like this is
an ongoing problem with Wellington. Why don't rate payers realize
that there's too much spending going on?

Speaker 3 (03:45):
Well, I think some of them do. I mean, I
guess the problem is there's a lot of transient voters
that come to town, isn't there. I mean they come
and vote, students lived here for the six months or
a year or something and they're all voting. Yeah, and
it doesn't directly affect them. I mean, it affects the
people that are left holding the baby.

Speaker 2 (04:03):
Yeah.

Speaker 3 (04:06):
But listen, the big story here is the council actually
agreed that the after two court after lost two court
cases and then one one, it won one because the
court didn't want to over the interfere with a democratically
arrived that decision if unless it was totally unreasonable. So
they've got got very close to doing that because it

(04:27):
was was unreasonable, but they didn't think it was totally unreasable,
and they agreed with the finding of the first two cases.
But the fact of the matter is the council got
out of that by agreeing with the rate players to
limit it to two point eight times. Now, this, this
council and councils before it had just gleefully gone against
that eel. So what's what's her commercial entity? What's what's

(04:51):
your entity? What's your council? If it cannot keep its word?

Speaker 2 (04:54):
Well quite, David Ian, good luck with it because it
sounds to me like you're going to need it. That's
Ian Ian Castle's director of the Wellington Company.

Speaker 1 (05:01):
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