Businesses demand rate freeze from Paul Pisasale
BUSINESS owners in Carole Park are calling for a commercial rate freeze after their rates bill has gone up 80% in the past five years.
The most recent rate increase is 15% for 2016/7 for the majority of over 20 businesses that attended a meeting with Ipswich council officers Andrew Roach (CFO) and Paul Mollenhauer (treasury accounting manager) to discuss their concerns.
The QT understands there will be no rate freeze but Mayor Paul Pisasale said he had asked Ipswich City Council CEO Jim Lindsay to oversee a probe into the business owners concerns.
In a letter to businesses ahead of the meeting Alvey Reels Australia managing director Bruce Alvey said council rates for commercial land had increased 64% over the past four years, whereas CPI had gone up 7.7% and land valuation had reduced by 2.6%.
Mr Alvey said that meant rates had gone up nearly 80% in five years.
"If you owned the same size block of land in the Brisbane City controlled Wacol Industrial Estate your rates could be as much as 50% less, or even more," Mr Alvey wrote. "Brisbane City Council Rates only increased 4% last year."
One business has confirmed they can no longer afford to be based at Carole Park and have recently put their premises on the market.
Others say they have been forced to make redundancies because of the rate increases.
Mr Alvey said the rates were "way out of the ball park".
"The Ipswich council has got all the reasons in the world for why they have ended up where they are but the fact of life is if you own a factory in Wacol you are paying probably 30-40 % less rates or even more," he said.
Mr Alvey's rate increase is 15%.
"But if your block is worth more than $5 million your rate increase is 25% which just boggles the mind why you have a bigger increase.
"Usually if you buy more you pay a lower rate.
"All the people (at the meeting) are not new businesses. We've been here 40 years and a number of others are 20 to 40 years.
"There are a number of businesses who have sold up and left and a number of others considering it which is going to mean vacant factories and less jobs in the Carole Park industrial estate which isn't what I would have thought council was about."
Mr Alvey and Masterol Food Oils' Will Cater have both told the QT they believe a rate freeze would be the appropriate action for council to take for this financial year.
"I understand that, because no-one likes paying rates including myself," Cr Pisasale said
"But it is the only way we can provide services to the city.
"With regards to Carole Park we have provided a free service to help every one of those businesses to help them grow through our economic development department, more than any other council, and we will continue to do that.
"Years ago there was a massive increase in valuations in their properties but I put a cap on (rate increases) so they wouldn't be slugged.
"The increases of 15% they have got now saved them from getting a 60 or 70% increase years ago which would have killed them.
"It is not just rates. It is a culmination of things happening with payroll tax and a lot of other things that are slugged on industry.
"State and Federal Governments need to give industry incentives to employ more staff and for innovation.
"Any changes we make at Carole Park will affect the pensioners of Ipswich so we are all in this together."
Australia Industry Group's QLD Director Jemina Dunn said "many of the businesses impacted at Ipswich were in the manufacturing sector - a sector which is currently struggling to transition in an economy that is rapidly restructuring".
"Ipswich has always been proud of its heritage as a manufacturing city with the sector employing a very significant proportion of local residents," Ms Dunn said.
"Ipswich City Council should be doing more to make Ipswich attractive to existing and new manufacturing operations.
"If local government is serious about stimulating local economic development and attracting investment we urge councils to consider the very real impacts on businesses when setting their commercial and industrial rates into the future."
Mr Alvey said business bottom line was being impacted while the rate increases were "also effecting investors trying to rent properties within the Ipswich controlled areas"
Cr Pisasale said he was taking the concerns seriously.
"I sent my two top guys down there to listen to their concerns and I have asked my CEO (Jim Lindsay) for a full investigation and I am waiting for the report back."
Mr Lindsay will oversee a review of the commercial rates categorisation and the report will go to council as part of the budget process.