CANBERRA is a great city to live in and it has been extremely giving to my family and our group of businesses over a long period of time.
When you’re in an extremely privileged position it is difficult to assess whether you have been dealt an unfortunate card in your business dealings.
After a great amount of soul searching I believe we have, as have our car-dealer competitors in the Phillip precinct.
Here’s why: on one of our large blocks of land that comprises three dealerships, the unimproved land value leapt almost doubling from $5,991,000 to $10,655,000 on July 1, 2017.
This equated to a jump in our commercial rates from $332,855 to $432,916 for the 2017 year. For the 2018 year, these rates jumped further by $107,732 and for 2019 I estimate them to jump another $100,000. That’s a 92 per cent rise in three years! I’m hoping this will level off in 2020, subject to any subsequent valuation increases and formula rate hikes. Despite making appeals to the ACT Revenue Office in early July, I’m advised they will not necessarily be replied to until January next year.
There are thousands of Canberrans who are doing it tough with residential rates increases and large heating and cost-of-living expenses, but I think that most fair-minded people would agree that these Phillip commercial rates increases are extraordinary and lead to some pertinent questions:
- Is the valuation system based on most recent sales in the Phillip area fair and were the valuations before 2017, 100 per cent off the mark?
- With more recent building sales in the last two years involving relatively poor sales outcomes, there has been no downward effect on the rates charges. Will these now be compensated for?
- There has been no proportionate change in Belconnen and Gungahlin commercial rates. Is this a good result for North Canberra motor dealers or simply a delay until the trams are up and running?
- There have been several sales of dealerships in the last short period. Is this largely due to the rates rises and concerns about economic viability in Phillip into the future?
The motor dealers in Phillip and beyond agree that we need to do our share of heavy lifting and are extremely grateful to the Canberra community for their continuing loyalty and custom, but we already contribute significantly through a range of territory and federal taxes and employ thousands of staff. We also try to do the right thing in terms of community and charity projects.
How are dealers expected to absorb increases like this when we are often constrained by manufacturers’ pricing edicts while juggling increasing costs in wages, rents and rates? Every expense item in our operation is under the microscope including jobs, which we did not even contemplate adjusting during the global financial crisis in 2009
Worse still, dealerships will have to consider moving from the central convenience of Phillip to the likes of Fyshwick, Queanbeyan and Hume. Does this spell the beginning of the end for the Phillip motor trade? Will our clients appreciate going out of their way for sales and servicing?
The Chief Minister and the Leader of the Opposition have heard my calls for some equity in regards to our rates charges. It’s time to review this injustice.
David Rolfe is the dealer principal of Slaven Mazda, which is located on Melrose Drive, Phillip.