COUNCIL is disadvantaging already struggling small businesses by slugging them with inequitable business rates, a prominent real estate agent says.
A summary report of comparative information between Goulburn Mulwaree and more than 30 similar sized Local Government Areas (LGAs) has revealed that local business rates are 41 per cent higher than the group average.
Peter Mylonas told the Post that small retailers were already ‘on Struggle St’ and that high rents – due to ‘exorbitant’ rates – were only making the things harder.
“Councils are finding it hard to balance their budgets so they are attempting to do it by hitting the business community but they need to find other ways,” he said.
Mr Mylonas said the number of empty shops in Auburn St was evidence of just how bad the situation really was and warned it was only going to get worse.
Higher rates not only meant an increase in rents but also a reduction in potential lease holders. This in turn devalued the property value for the owner.
He said retailers were not getting value for money and deserved an explanation as to why they were expected to pay so much more than everybody else.
“It would be different if Council were charging these people extra and then actually using that money to beautify the Main St and attract more visitors and more traffic coming through, then they wouldn’t mind as much but they’re not,” he said.
“My big question is why are we paying so much more and what are we getting for our money? You could understand if we were five per cent more but this is just so far out of whack. There needs to be accountability. I don’t know why councillors aren’t saying anything about this. I don’t know if it just snuck past them or the report came out and they didn’t read it or what’s going on.”
Council’s director of corporate services Brendan Hollands told the Post that CBD business rates were higher on average because a levy imposed by Goulburn City Council more than a decade ago was still being charged.
The levy was originally charged to help pay for CBD beautification and improvements.
However, when the amalgamation occurred, Goulburn Mulwaree just adopted the old rate structure which included increased business rates.
Mr Hollands said Council was making an effort to equalise business rates between CBD and non-CBD businesses and that there was scope to look at reducing business rates.
However, he warned they would not be able to function with a smaller rate yield and that a reduction in business rates would ultimately lead to an increase in residential and/or farmland rates, both of which are currently below the group average.
Chamber of Commerce president Rob Walker didn’t believe it was fair of Council to subsidise other people’s rates by constantly slugging the business community, especially when so many small retailers were doing it tough. What was needed was an open dialogue and greater equity.
“I honestly think we need to sit down with Council and reevaluate the rate structure,” he said.
“We need to go over these rates and have them explain to us why they’re higher and work something out…(because) it’s not fair. It should be a level playing field.”
Mr Hollands said it was important when looking at the comparative figures to recognise the impact of outliers.
In the assessment report LGAs like Singleton, Richmond Valley, Kiama and Kempsey brought the group average down. Similarly, when looking at local statistics, Council collects a little over $4 million in business rates from more than 860 properties. The top 10 premises accounted for almost $1m of that.
While he recognised the plight of small businesses compared to large multinationals, he said it was illegal for Councils to charge big business more than the little guys. Section 529, Part 2D of the Local Government Act states that rates can only be determined by zones and activities within that zone ie CBD or Industrial.