Just heard a repeat of Newstalk discussion on commercial rates,an important issue given that retailing is about 70% of the economy. A rule of thumb one time was that rates were about 15% of commercial rents but they now are more than the rents as councils try to compensate for the loss of levies on new construction since the boom ended. Surprisingly,councils are still planning to increase levies by a whopping amount, maybe 70% in the next five years. A businessman interviewed on Newstalk advised businesses to make sure to appeal excessive rates quickly as unchallenged increases in rates would apply for 10 years.
Councils don't want to face the fact that the boom is over when they budget their expenses. That could explain Environment Minister Hogan's plan to restructure them to save on admin costs.
The effects of higher rates on retailing are dire in many areas,especially those competing with new shopping centres. Many small town streets have more boarded up shops than open shops. Even a substantial shopping area like Dun Laoire has a very high proportion of shuttered shops,according to the businessman on Newstalk. This is killing off jobs.
A sensible approach to setting rates by councils would be to keep as many businesses open as possible,instead of the councils' present tax gouging attitude. Maybe the national government should intervene and set limits on rates in relation to rents and property valuations,given that it stands to gain hugely from taxation collected on increased employment.