Ballarat commercial rates among highest in state

The Courier figures show the City of Ballarat charges the third highest commercial rates when combined with waste and municipal charges.

The average Ballarat business with premises valued at $500,000 will pay $5117 this financial year. Only business owners in Shepparton and Ararat pay more.

A commercial premises within the municipality of Melbourne – the only council that uses a rent based system – would need to pay annual rent of more than $110,000 before its rates would go above a Ballarat business valued at $500,000.  The study does not take into account fluctuating property values.

Ballarat homeowners are closer to the median, paying the ninth highest residential rates out of the 20 key municipalities, according to The Courier poll.

The average homeowner with a property worth $300,000 would pay $1359.20. According to council’s 2012-13 budget, commercial rates are higher because “the rate reflects the level of service provided”, business rates are tax deductible, and “rates tend to be a lower order factor in business investment decisions”. 

The 142-page document also outlines a “ceiling” increase on residential rates of four per cent per year, however in 2013-14 rates are set to rise by 5.5 per cent as a “top up” to fund the defined benefits superannuation scheme and “to provide funds into the future”.

Council chief executive Anthony Schinck defended the commercial rate, saying business in Ballarat still represented good value for investors. “Over the last few years, the City of Ballarat has worked to keep residential and farming rates as low as possible,” he said.

“This has meant that commercial rates have had to be proportionately slightly higher than residential and farming.

“Ballarat represents value for money for business. Our CBD is affordable and investors can get a much larger property with street frontage in Ballarat than other cities.”

Rate bill felt like slap in the face

WHEN Colin Hayes received his commercial rates notice, the 15 per cent increase felt like a slap in the face during one of the toughest years yet for his business. 

The owner of Inhabit Kitchenware and Gift Specialists in the Bridge Mall said the discrepancy between business and residential rates was unfair.

"I'm not too sure if we get good value for money as a business," he said.

"We don't get any rubbish collection so we've got to pay contractors to do that. We pay our rates, but we also contribute to the Bridge Mall Traders Association ... and that's significant as well." 

"Double (residential rates) is too much. I think maybe businesses should pay marginally more but not to the extent they are.

"I mean you just can't keep putting your prices up to cover it because then consumers won't buy the products. You've got to be competitive, it's a double edged sword."

Several other businesses who did not wish to be named said they were also frustrated by the amount of rates they paid. Ballarat Residents and Ratepayers Association president Elisa Backer hit out at council, saying Bendigo traders got a far better deal.

"Businesses in Bendigo have to compete and go on waiting lists for shop space. Shops are full not empty," she said. "Compare that to Ballarat. "Council wastes millions on consultancies, poorly conceived projects, inefficient tenders, and over-staffing.

"To fund this they increase household rates and charge high commercial rates. I'd rather see them become more efficient to survive on a smaller income."

Commerce Ballarat board member and director of Colliers International Ballarat, David Wright said the level of commercial rates should not be viewed negatively. "As long as we continue to receive the benefits from continuing to pay our rates, we'll support council and their decisions in the future," he said. 

"At the end of the day rates are thrown into the mix of all other costs associated with running a business generally. Power and gas have gone up, rents are going up ... and obviously council rates increase as well."