The Brisbane Lord Mayor Jim Soorley has thrown down a wager to Property Council of Australia Queensland executive director Ross Elliott over an ongoing debate surrounding last year's rate increases with the removal of the 5% early payment rebate.
Speaking at a post-budget Property Council of Australia breakfast last week, the Lord Mayor was adamant the net take on rates in the last financial year did not increase anywhere near the level suggested by the Property Council of Australia.
The Lord Mayor is favouring the Council’s calculations over the Property Council of Australia’s estimated 8 - 10% increase, based on figures provided by members.
If the final numbers prove a less than 8% increase, the a bottle of Grange Hermitage is the Mayor's.
In this years budget, released on June 14, the Property Council was disappointed at the decision not to reintroduce the 5% early payment discount for major ratepayers.
The Mayor has argued the rebate is illusory as it doesn't affect the overall city centre rates position.
The bet was a light hearted moment but the issue remains a serious one for city properties.
Rising statutory costs - mainly rates and land tax - are increasing at rates well in excess of capital growth or inflation, and at the same time owners have been able to reduce the controllable outgoings. The increasing government costs are impacting on bottom lines and occupancy costs, making the city less and less cost competitive as a business location.
However, the change towards a user pays basis for sewerage services - based on the number of pedestals in premises, rather than a system based on the areas of a building - is likely to benefit a number of commercial property owners.
The limited increase in this years CBD rates is also good news, with the CBD's share of the overall rates base falling to below 10% of the total city rates.
This reflects a stable CBD, and the growth of the residential sector across the metropolitan area.
However, on balance, the Mayor should be supported for balancing the commercial and residential sectors and keeping overall rate increases under control.
Sixty-eight percent of the Budget’s $433.3 million is to be spent on infrastructure.
This includes a further $72 million on the inner-city bypass and $1 million for preparation work in the lead up to calling for tenders for the proposed tunnel linking the inner-city bypass to the South East Freeway.