Wollongong businesses not only pay the third highest business rates in NSW – the rates are almost three times higher than Sutherland and Shellharbour.
The Illawarra Business Chamber is concerned about the business community’s ability to absorb further rate increases and has called on Wollongong City Council to put them on hold.
While all ratepayers in Wollongong face higher rates than those in similar local government areas (LGAs), the chamber said businesses were paying significantly higher rates.
A submission to Wollongong City Council prepared by the chamber’s policy manager, Jancey Malins, said the most recent comparative data from the Division of Local Government showed that in 2011-12, the average business rate in Wollongong was $8995 a year, compared with the group average of $4384, and rates paid by businesses in the city were more than double those paid in other similar areas.
Only businesses in Parramatta (average $9793) and the City of Sydney ($9582) paid more.
The average residential rate in Wollongong was $1044, 14per cent above the DLG group average of $910.
The chamber said while the presence of large manufacturing businesses and the City Centre and Wollongong Mall Special Rates would drive up the average, the advalorem rate being charged to businesses in Wollongong exceeded other LGAs.
The submission said excessively high rates put significant pressure on Wollongong businesses, which continued to report a low outlook on profitability and business confidence.
They added to the costs for prospective entrepreneurs and made Wollongong less competitive and less appealing as a place to do business.
The chamber recommended that in order to achieve its objective to support and promote job creation and business growth, the council should expand the exclusion from Special Rate Variation to all businesses, not just the 3c Regional Business and Heavy 1 Activity 1.
It acknowledges its proposal would reduce projected council revenue streams, but it said introducing rate increases of between 17 and 26per cent over the next three years would cost the city in terms of jobs, profitability and economic growth.
Under present economic conditions, local businesses simply did not have the capacity to pay higher rates, it said.
It believes a business rate rise would also place significant additional pressure on businesses in the City Centre that pay additional levies, many of which will have faced a downturn in business as a result of the CBD revitalisation project.
‘‘There are a number of different categories for business, but there is two they are saying they will exclude,’’ chamber chief executive Debra Murphy said.
‘‘We are saying you should exclude the lot, because we are paying significantly more. Existing business do it tough and the cost of doing business is high.’’
The chamber’s concerns include the chance of more businesses closing or moving.
Ms Murphy said businesses were also less likely to employ extra people if their other costs kept rising.
Average business rate by LGA (2011-12):
Coffs Harbour $3590
Lake Macquarie $3210
Port Macquarie-Hastings $3000