Business

Gladstone sliding further into slump following LNG boom

BUSINESS owners are calling on the council to cut infrastructure charges as Gladstone slides deeper into the bust following the LNG boom.

There is widespread speculation that more job losses are on the way as major companies face falling commodity prices.

If small business is going to pick up the slack, owners will need some help.

But the council looks unlikely to offer discounts "willy-nilly" and explains that while some industries are suffering, the economy is still generally growing.

Doing nothing, however, is against the advice of experts who say if regional councils don't act now to bring new investment into town; the consequences could be felt for years to come.

Many are demanding it is put high on the agenda of the local government elections next month, including one business owner who has been handed a bill for $24,000 in infrastructure charges; that's on top of $60,000 in start-up costs he's already forked out.

Since opening his personal training business seven months ago Brett Newman has employed six people and brought new life into an old, empty building on Toolooa St.

But while his client base is growing and sessions are often fully booked, Mr Newman isn't making a profit and he doesn't expect that will change in the next 12 months.

HELP US: Before the elections personal trainer Brett Newman is called on the council to offer a discount on infrastructure charges for small business to help fight the economic downturn.
HELP US: Before the elections personal trainer Brett Newman is called on the council to offer a discount on infrastructure charges for small business to help fight the economic downturn. Paul Braven

He's typical of Central Queensland business owner confidence, according to the results of a Chamber of Commerce and Industry Queensland survey released this week.

It shows a decrease in business confidence across the region over the next 12 months.

The chamber's senior policy adviser Kate Whittle said offering discounted infrastructure charges and ensuring applications were processed quickly was the best way councils could help their communities through the economic downturn.

"Our first piece of advice is to listen to what businesses in region are telling you. "If they are saying they're not confident... businesses won't invest, which means they won't grow and won't create more employment."

Mr Newman suggests the council could follow the lead of neighbouring regional councils - Rockhampton, Bundaberg, Gympie and Fraser Coast - and offer discounts, giving those looking to start a businesses some incentive.

"Some more flexibility between the categories that the council uses to calculate its rates would help," Mr Newman said.

"If they can offer discounts to big businesses like Stockland, why can't they offer them to us too?"

But discounts are only offered by councils to address specific problems, council CEO Stuart Randle said, such as bringing more people and businesses back into the CBD.

>>Stockland's $1.7M discount on charges

>>Building industry calls for cuts to infrastructure charges

That is being considered for the CBD now, Mr Randle said, but, "it wouldn't make sense to offer discounts at a time when we are growing faster than others".

"At the moment our community is growing the fastest in the state …," Mr Randle said.

"We can't hand out discounts willy-nilly. Either the people who directly benefit from the services pay or everyone pays (through rates)."

Infrastructure charges cover the cost of maintenance of and wear and tear on shared council assets including roads, drainage and the sewerage system.

That money has to come from somewhere and reducing infrastructure charges would likely mean increasing rates.

Mr Randle said it was "unlikely" the council, new or current, would move on infrastructure charges.

Gladstone has seen unprecedented growth in the past three financial years and while "a few" concessions have been made on a case-by-case basis, the council has rejected most applications for a reduction in charges.

The charges

  • Gladstone's charges for a commercial 'showroom' $140 per sq m;
  • Rockhampton's charges for a commercial 'showroom' $119 per sq m;
  • Gladstone's charges for a 'warehouse' $50 per sq m;
  • Rockhampton's charges for a 'warehouse' $42.50 sq m;
  • AND: Between December 2013 - December 2015 Rockhampton offered discounts on infrastructure charges of up to 100% for developments within the CBD and 50% for areas outside the CBD.

Follow this reporter on Twitter @helenspelitis

Topics:  gladstone business, lng industry, unemployment




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The improvement would be mild when compared to past cycles