THE new South Gippsland Shire Council has been urged to lower rates for commercial and industrial properties in a bid to help small businesses under financial pressure.
The Star understands landlords and building owners are facing high rates bills, and are being left with little option but to pass those costs on to tenants and customers.
The impact of high rates has been raised in the wake of a high proportion of empty shops in Leongatha’s central business district.
Councillors last week received a briefing about how council can help small businesses and that briefing covered council fees and charges. Council is now seeking more information from officers.
One local businessowner said high rates were stifling the economy, with their rates more than doubling in the past five years. On top of other rising costs, that was hurting the business.
“If you want to entice businesses to town, then you don’t have astronomical rates,” they said.
“The landlords are passing the cost on and it’s another cost for the businesses and that’s passed on to the consumer.”
The businessowner said they received no direct services in return for their rates, apart from the occasional sweeping of the street, and urged council to consider other revenue sources.
“Screwing the ratepayer over is not the answer,” they said.
“I wish with my business that I knew I had a set clientele that was going to pay me a set amount of money. There is a big difference between running a private business compared with running the shire. They just keep putting up the rates.
“We pay for their stuff-ups. They do not budget correctly and our rates go up to cover their costs.”
Other businesspeople told The Star high rates were eating into profits, with businesses unable to increase the price of goods without deterring customers from spending.
Leongatha Chamber of Commerce and Industry president Brenton Williams said the time was right for council to reconsider commercial and industrial rates, and how these affect businesspeople.
“The new council could review the rates for the commercial and industrial sectors, and try to encourage more businesses to come in, especially in the bigger shops, and give them a cut for a year or two to get them going and then jack them up after that,” he said.
“There should be more of an incentive for new businesses to come to town.”
Cr Argento said council had asked for a report from officers about how council can better help small businesses.
“Council is aware of the impacts and difficult times some small businesses are currently facing,” he said.
The previous council increased commercial and industrial rates to 105 percent of the residential rate to help give farmers a further rates discount.
That decision could be revisited when council reviews its rating strategy next financial year.
Commercial and industrial rates in South Gippsland Shire are more expensive, on a capital improved value basis, than in Bass Coast Shire.
In Bass Coast, the rate in the dollar is the same as residential rates, at 0.0037639 cents in the dollar. The average commercial or industrial rates bill is $2672, based on a property valued at $710,000.
Mayor Cr Pamela Rothfield said, “In comparison to other similar large rural councils, Bass Coast’s average rates are one of the lowest.”
South Gippsland’s commercial and industrial rates are cheaper, on a capital improved value basis, than Baw Baw and Colac Otway councils, both large rural shires.
South Gippsland charged 0.00562853 cents in the dollar of capital improved value for 2016-17, while in Baw Baw Shire, the cost is 0.005857.
Colac Otway Shire Council charges 0.00721 cents for properties in Colac, Colac East, Colac West and Elliminyt, and 0.006118 cents for properties elsewhere.
Short URL: http://thestar.com.au/?p=20872