Rates cap and the business differential: our letter to the Minister of Local Government
CBA warned the Minister that a cap framed around the average ratepayer invites councils to shift rates onto business. The reply did not address our asks.
On 20 August 2026 CBA wrote to the Minister of Local Government warning that a rates cap framed around the average ratepayer gives councils an incentive to shift more of the burden onto business. Auckland's Revenue and Financing Policy fixes business at about 31% of general rates and the major region-wide targeted rates, even though business holds about 16.5% of capital value and 9.3% of SUIPs. Business general rates rose about 70% from 2016/17 to 2025/26.
What we asked the Minister for
We asked for three things: (1) the cap must stop councils raising business's relative share to keep residential increases inside the band; (2) mandatory reporting of the business vs residential revenue share and any change to differentials; (3) exemption or variation processes must not embed higher business differentials.
What the Minister's office replied
The Minister's office replied on 15 October 2026 (ref COR3328). The reply described the Local Government (Rates Capping) Amendment Bill, now before the Finance and Expenditure Committee, the 2-4% target range, new long-term plan reporting from 2027 and the full regime from 2029. It did not address any of our three asks.
Why it matters, and what comes next
The bill measures the cap as an average rates price per rating unit (s 26A) and says nothing on differentials, so a council can comply while shifting rates onto business. CBA will make a submission to the select committee seeking amendments on all three points.
Further reading
Frequently asked questions
Why could a rates cap shift rates onto business?
A rates cap framed around the average ratepayer gives councils an incentive to shift more of the burden onto business. The bill measures the cap as an average rates price per rating unit (s 26A) and says nothing on differentials, so a council can comply while shifting rates onto business.
What share of Auckland rates does business pay?
Auckland's Revenue and Financing Policy fixes business at about 31% of general rates and the major region-wide targeted rates, even though business holds about 16.5% of capital value and 9.3% of SUIPs. Business general rates rose about 70% from 2016/17 to 2025/26.
What did CBA ask the Minister of Local Government for?
Three things: the cap must stop councils raising business's relative share to keep residential increases inside the band; mandatory reporting of the business vs residential revenue share and any change to differentials; and exemption or variation processes must not embed higher business differentials.
How did the Minister's office respond?
The Minister's office replied on 15 October 2026 (ref COR3328), describing the Local Government (Rates Capping) Amendment Bill, now before the Finance and Expenditure Committee, the 2-4% target range, new long-term plan reporting from 2027 and the full regime from 2029. It did not address any of CBA's three asks. CBA will make a submission to the select committee seeking amendments on all three points.
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Written by Mark Pervan, Director, City Builders Association Limited
Mark Pervan is the founder and director of City Builders Association Limited, an Auckland civic think tank funded solely by membership. He has run manufacturing plants, with global sourcing and supply chain management in the same role, and has been project manager on multiple commercial and residential building projects. He was also responsible for product design and development across multiple mediums, and served as sales and marketing manager. He is a company director and business owner, including as a director of Idea Foundry. He served three years as an elected member of the Puketāpapa Local Board (2022–2025) and was a council candidate for the Albert-Eden-Puketāpapa ward of Auckland Council.
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