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 (00:00):
Wellington. 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. Rather. Ian Castle's is the
director of the Wellington Company, which is one of the

(00:20):
city's largest commercial property developers. Who's with us now?

Speaker 2 (00:23):
Hey en believing in keV? How are you?

Speaker 1 (00:25):
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 2 (00:33):
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 that's broken, then you just
keep you keep on going back. So that's why it's
been the one in commercial owners for years now.

Speaker 1 (00:45):
So the problem seems so is the problem as simple
as this that the commercial guys are bearing are basically
carrying a disproportionate amount of the rating burden. And then
the residential guys are paying less than they should.

Speaker 2 (00:58):
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 levies attached

(01:19):
to the commercial rate apart from the three point seven
times differential, which is downtown levy, sewage and targeted water rates,
and then a 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. Yeah,
and you've got to give them parties when they don't exist.

(01:41):
So all of that falls upon some pull basket with
an empty building.

Speaker 1 (01:44):
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 2 (01:50):
Yes, it's like a big it's a big taking machine.
Like it's just And then when they talk about Warrington
being forty eight percent of the Warington business paper out
percent of the city's So 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

(02:11):
the great provider, and you know in the past that
may will have been, but it just can't keep on
doing that and it can't pay. I mean, some b
and seafast buildings they're paying half of their income and
insurance and rates, and the ones that's having been the
income as all their numbers just paying a whopping great
pot of money for the privilege of having an empty

(02:33):
building in Warnington.

Speaker 1 (02:34):
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 2 (02:46):
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 you've got
to get this.

Speaker 1 (02:56):
Is 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 2 (03:08):
That's a strange thing to hear. Well, I don't know.
I mean, we can't comment on that right now until after.

Speaker 1 (03:14):
The elections, 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 2 (03:28):
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, student, lived here for 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 1 (03:47):
Yeah.

Speaker 2 (03:49):
But listen, the big story here is the council actually
agreed that the after two lost two court cases and
then one one at one 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
very close to doing that because it was unreasonable, but

(04:12):
they didn't think it was totally unreasable, and they agreed
with the finding of the first two cases. But the
fact of that as the council got out of that
by agreeing with the rate payers to limit it to
two point eight times. Now this council and councils before
it had just gleefully gone against that deal. So what's

(04:32):
what's her commercial entity? What's your endity? What's your council?
If it cannot keep its word?

Speaker 1 (04:37):
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 2 (04:45):
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