The president of Grafton Chamber of Commercie, Justin James, right, pictured with former president Katie Kelemec and treasurer Glenn Thompson, says the SRV could be unaffordable for some businesses.
The president of Grafton Chamber of Commercie, Justin James, right, pictured with former president Katie Kelemec and treasurer Glenn Thompson, says the SRV could be unaffordable for some businesses. Debrah Novak

Chamber boss makes swift reply to SRV announcement

THE response from the local business sector to IPART's approval of an 8 per cent special rates rise was swift.

Some businesses could go to the wall because they cannot afford to pay their rates, said president of the Grafton Chamber of Commerce, Justin James.

Mr James, who led a campaign against the SRV said there were businesses that could go under if their rates rose.

"The last thing they needed now was something like this that they just can't afford," he said.

Mr James said while the council needed to do something to recover from its position after years of not doing well, the SRV was poorly timed.

"There are definitely businesses who are just starting to show some improvement," he said.

"They will feel their futures are at risk again."

Mr James said the chamber would now have to look at what it could do support the businesses affected.

"As a chamber we'll have to find a solution to ensure the sustainability of local businesses," he said.

"The local economy has been on the up so we'll have to work that bit harder."

While the IPART chair Dr Peter Boxall agreed the rate rises were significant, he said the council had succeeded in justifying them.

"There was considerable opposition from the community to the rate increase proposed by the council and the impact on ratepayers will be significant," Dr Boxall said.

"But should the council proceed with its plans, we have assessed that the increase is reasonable as current rates are lower than those in similar council areas, rate payments as a percentage of average income is similar to neighbouring council areas and the council has a need for additional revenue to improve financial sustainability.

The IPART report said an SRV was essential if the council was to become sustainable.

"Under the special variation scenario, the council forecasts operating surpluses from 2020-21, growing to 3.1% by 2027-28. The cumulative value of these forecast surpluses is $6.9 million to 2027-28," it said.

"The improvement in the council's financial sustainability from the additional special variation revenue will allow it to meet the operating performance benchmark by 2020-21 which is the timeframe set by the Office of Local Government's Fit for the Future Reassessment program.

"Without the special variation, and assuming the council's expenditure is the same as under the special variation scenario, it forecasts consistent operating deficits.

"The cumulative value of these forecast deficits is $43.8 million to 2027-28 under this scenario.

"Hence, without the special variation, the council's financial sustainability would deteriorate, and it may not generate sufficient funds to address the additional asset renewal and asset maintenance funding required to maintain an adequate level of services for its community."