City of Darwin and Darwin Airport clash over missing million in rates equivalent

A City of Darwin councillor has called out one of the NT’s largest businesses for unpaid rates – which may result in ratepayers being slugged an additional 1.4 per cent on their existing bill to recoup.

Aerial view of the new Darwin Airport resort. November 23, 2023. Picture: Sierra Haigh

Airport Development Group has been accused of welshing on more than a million dollars in payments owed to City of Darwin.

The airport and surrounding commercial precinct, which is owned by superannuation fund managers IFM Investors and Palisade Investment Partners, is one of the NT’s largest corporate entities.

But according to City of Darwin councillor Mick Palmer, this hasn’t stopped ADG from failing to pay council more than a million dollars owed in rates equivalent.

Council said that to recoup the money its owed by the airport, it would need to slug ordinary Darwin ratepayers an additional 1.4 per cent on their existing rates bill.

The matter was discussed under confidentiality provisions at last week’s City of Darwin meeting, and Mr Palmer has gone public to call the airport out.

Mr Palmer said commercial properties such as Bunnings, which is on ADG land, would have a significant commercial advantage if it was not paying a rate equivalent to ADG.

He said the Airport Development Group used to pay a rate equivalent to City of Darwin, but this stopped after former chief executive Ian Kew left the role in 2019 and was replaced by Tony Edmondstone.

In a statement, City of Darwin confirmed it was in dispute with the airport over non-payments of rates equivalent.

Darwin councillor Mick Palmer. Pic Glenn Campbell

“Darwin International Airport Pty is required to make a financial contribution to the city in lieu of rates on land which is subleased to tenants, or land on which trading or operations are undertaken,” a council spokesperson said.

“Darwin International Airport complied with this requirement under their lease for many years, however following a change of leadership they stopped meeting their obligations.

“Several payments of nominal amounts have been made, however $1,070,784.22, including interest as at April 23, 2024 is still owing.

“Darwin Airport utilises City of Darwin assets that are paid for by all rate payers, including the stormwater system that accepts stormwater run-off from airport land and the Shoal Bay Waste Management Facility, which is ratepayer subsidised.

“To recoup the debt would be the equivalent of a 1.4 per cent rate rise to residents and be unfair to local businesses not on airport land which do pay rates.

“City of Darwin has engaged with the Darwin International Airport for over three years on this matter and will continue to attempt to engage with the airport to seek payment and resolve this matter.”

Darwin City from the airport. Picture: Floss Adams.

Mr Palmer estimated up to 80 Territory businesses that pay rates to council could be commercially disadvantaged if businesses such as Bunnings were not paying rates.

He said it was unclear whether ADG was slugging businesses the rates equivalent and not passing on to council or simply not collecting the rate equivalent.

The NT News is not suggesting Bunnings isn’t paying a rates equivalent to ADG.

In response, ADG initially glossed over the NT News’ request for clarification on how much rates equivalent it owed City of Darwin.

“DIA pays a rates equivalent to the City of Darwin, similar to all other Australian airports on Commonwealth land, tenants on airport land contribute towards these rates through their levies paid to DIA,” it said in a statement.

The airport revised its statement when it was pointed out council said it owed more than a million dollars in rates equivalent.

“Darwin International Airport continues to work with City of Darwin to determine an appropriate rates equivalent in line with the Airports Act. In the meantime, DIA continues to pay contributions to City of Darwin while ongoing negotiations take place.”

A long-running court case finalised last year ruled the 22 airports on Commonwealth land did not have to pay rates.

Originally published as City of Darwin and Darwin Airport clash over missing million in rates equivalent