Burnside Council votes against huge rate rise on commercial properties ahead of rate-capping

BURNSIDE Council has voted against a proposal to raise commercial rates by 50 per cent.

Burnside’s biggest ratepayer, the Burnside Village shopping centre. Picture: Eugene Boisvert

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• Burnside Village planning $131 million expansion

BURNSIDE Council has voted against a proposal to raise commercial rates by 50 per cent.

Councillors also voted on Tuesday night against seeking a report into how the extra money — about $1.1 million — could be spent on economic development.

A report to the meeting suggested the massive rate rise to stash cash ahead of rate-capping coming in next year.

Burnside Council currently charges much lower rates on businesses than neighbouring councils.

Rather than increasing rates as proposed, Cr Grant Piggott put up a motion that the council seek a report by February 2019 into what programs or infrastructure could be paid for with the extra rates.

It failed on a casting vote by Mayor David Parkin.

Mr Parkin said it was not appropriate to push the matter on to a new council.

Local government elections will be held in November.

The State Government and the Property Council labelled the move “irresponsible” and “oppressive”, and The Cohen Group, which owns Burnside Village, also opposed it.

Burnside Council argues its commercial rates are much lower than neighbouring councils.

Burnside Mayor David Parkin.

The owner of a $1 million office building in the Unley Council area paid in $5998 in rates in 2017, compared with $2192 in Burnside.

Unlike most councils, Burnside charges the same rate in the dollar on commercial properties as residential ones.

A report by the council’s group manager for finance and strategy Karishma Reynolds says the proposed commercial rate rise could “assist council in preparing for any impacts that may limit council’s future revenue-raising opportunities which may occur as a result of the current State Government’s rate-capping proposal”.

The Government plans to bring in laws limiting council rate rises to a level just above inflation in 2019.

The Burnside staff report recommended a 50 per cent rise, with options up to 100 per cent.

Earlier, Mayor David Parkin said it would be “courageous in the Yes, Minister sense for us to embark on that”.

“It’s part of the decision (on the budget) but personally (I think) it doesn’t actually help much in terms of bringing down the rates of residents because if we were to do that we’d be obligated to spend the extra money on business,” Mr Parkin said.

Burnside Village owner The Cohen Group is the council’s largest ratepayer.

Chief executive John Blunt said any rate rise would make it more difficult to secure tenants for the company’s planned $131 million expansion of the shopping centre, as they would have to pay higher rent.

“As we’re looking to expand Burnside Village, that would result in significantly more rates for (the) council so it’s our view (that they should) expand the rates base and encourage that rather than the rating factor,” Mr Blunt said.

Mr Knoll said it would be “irresponsible, reckless and disingenuous of councils to jack up rates this year in anticipation of an incoming cap on council rates”.

Empty shops on Greenhill Rd in Glenside. Picture: Eugene Boisvert

Property Council SA executive director Daniel Gannon said the massive rate rise was “an oppressive, anti-business proposal from a council seeking to gouge property owners”.

“If council is looking for income, it should start exploring its own cost reductions and inefficiencies along with diversifying its revenue stream outside of council rates,” Mr Gannon said.

Councillors voted earlier this month against including an option in the draft budget of reducing total annual expenditure by 5 per cent.

Overall, Burnside Council’s draft budget includes a 2.7 per cent rate rise and an $826,000 surplus.

Debt would rise from $14.9 million to $16.3 million.

According to State Government figures, Burnside rates have jumped 51 per cent over the past 10 years, the second lowest increase in Adelaide behind Port Adelaide Enfield.