The proposed system allows people to pay lower rates for less time - as little as 40 cents - but this amount may buy anywhere between eight and 32 minutes, depending on parking time limits.

Half-hour spaces would be 50 cents cheaper under the new proposal but the maximum for one and two-hour spaces remains at $2.

Chamber CEO Greg Fisher said that although introducing pro rata rates was a positive sign, the different rates would create confusion for shoppers.

That view was endorsed by shopper Bernie Gray-Spence, of Corrimal, who said he thought it was a good idea to reduce the $2 flat rate but was confused by the proposed changes.

"It just seems too complicated for the normal human being. People don't want a maths exam when they come into town, they just want to shop. Fifty cents for half an hour seems simpler," he said.

Mr Fisher said in feedback the IBC had given the council, it had proposed a standard 50 cents for half an hour rate.

"The IBC is urging council to charge 50 cents per half hour, no matter how long the parking zone is for. This would introduce fairness and simplicity into parking policy," Mr Fisher said.

Council general manager David Farmer said, while still open to community feedback, the council had proposed a graduated rate to encourage availability in all spaces.

"We have found that people are prepared to pay more for the really good spots," he said.

"The price signals drive people to the most affordable spots for their needs, otherwise they'll be driven into the city centre."

Acting infrastructure and works director Peter Coyte said the differentiated rate encouraged a high turnover in the city centre.

"Thirty-minute spaces are located in the core of the CBD to encourage turnover for people who want to pay more to park right in front of a shop or cafe," he said. "Three-hour spaces on the fringes of the CBD are for people who want to pay less to stay for longer."

The council also said, due to difficulty in policing, the hourly rates needed to be high enough to discourage meter feeding.

Mr Fisher said the council's proposal had a way to go before it had the desired effect of bringing shoppers back into the city centre.

Andrew Reveley, owner of Wise Eyes optical in Wollongong Central, said the proposed changes wouldn't do enough to improve parking in the CBD.

He said the council needed to listen to the local business community at an upcoming public meeting at City Diggers on July 14.