Ballarat City Council is taking steps to ease the burden on businesses - but a big gap between commercial rates charged here compared to elsewhere is likely to remain.
High rates have long been a gripe among the city's business community, with many paying thousands of dollars more each year than regional counterparts elsewhere.
The council is opting to increase rates across the board by 1.5 per cent - the maximum possible under a state-government imposed cap - a year after a rates freeze was imposed in the midst of the COVID-19 shutdown.
The benchmarking we did demonstrated that industrial and commercial [rates] were a lot higher than our like citiesCity of Ballarat CEO Evan King
Under the 2021/22 draft budget plan released on Thursday, the commercial and industrial sectors will be shielded from the sharpest rises, while residents will see larger increases.
The average residential rate in Ballarat will be $1,492, $53 more than last year - the equivalent of a 3.7 per cent rise.
CEO Evan King said it was the start of an attempt to address a disparity he had been aware of for some time before his arrival this February.
"With everything you change there's an equal impact somewhere else in the end. One of the principles of raising [rates] is equity.
"I am trying to balance [reduction in commercial rates] with what capacity a pensioner has [to deal] with a massive increase at the same time."
With the way rates are calculated using property prices as a multiplier, homeowners whose residences have gone up in value the most can expect to see the most substantial increases.
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Those paying commercial property rates also benefit from a gentler spike in the property valuations for the sector.
If the plans are approved, commercial and industrial ratepayers in Ballarat will pay a combined total of $30,290,559 of the total revenue due to be collected in the next financial year.
It is $566,000 less than the amount collected in 2020/21, and represents around 27 per cent of the total rates income ($111,249,795) the City of Ballarat plans to collect next financial year.
When combined with waste charges it forms just shy of 50 per cent of the municipality's predicted income of $267,549,000 for 2021/22, which is set to be bolstered by more government grants than the previous year.
The CEO of Commerce Ballarat Jodie Gillett welcomed news of the cut to commercial rates, with the caveat that she was yet to study the detail of the budget, which is now out for community consultation.
"Many businesses have had the worst year possible," she said. "It's pleasing to see commercial rates are a focus and it's pleasing to see them coming down."
Lauchlan Waddell, a commercial sales and leasing agent for Colliers International, said the high rates were a potential restraint on new businesses coming.
"It's good to see [commercial] rates are going to be reduced," he said. "Hopefully they will align with other regions in the state.
"It's come at a good time. It's something I think will benefit the whole of Ballarat."
Unlike residential properties where the owner has to pay rates, it is the tenant in commercial properties who needs to pay.
Nick Shady, who owns a commercial property on Sturt Street - now vacant after a travel agent business folded - remains sceptical of the impact of the cuts.
"We will see whether the shops fill," he told The Courier. "With the rates burden on small businesses, the activation of the CBD is still struggling."
He remains unsure whether he will be able to find a new business to rent the property, and is considering a move to open it up to residential tenants.
A four-year revenue plan that is now open to feedback suggests the City of Ballarat will gradually reduce the difference between commercial and industrial rates and those paid by homeowners.
In the budget, the differential stands at 267 per cent - ie a commercial ratepayer would pay a rate more than two and a half times the amount charged to a residential homeowner for a property valued the same.
In Geelong it is 239 per cent, while in Bendigo it is 185 per cent. Over four years, that will come down to 250 per cent in Ballarat.
"The benchmarking we did demonstrated that industrial and commercial [rates] were a lot higher than our like cities," Mr King said. He recognises that parity will not be reached this council term but hopes future councils will continue the process.
In Geelong commercial and industrial ratepayers currently pay around 21.4 per cent of the total rates bill, while in Bendigo it is around 20.6 per cent.
The draft budget also outlines a capital works plan which Mr King described as "one of the highest ever."
For the first time, estimated carry forwards are included in the budget to give a clearer picture of how money is likely to be spent.
High-profile projects include the Alfredton Reserve upgrade, Ballarat Library renovation and lighting for Lake Wendouree.
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