Keeping council

ONE has to wonder what our councillors were thinking when they come up with the ludicrous idea of increasing business rates across the whole Valley, except for Grafton, which needs a "reprieve".

If they were in the racing game they'd be adding more weight to the rest of the field while reducing the weight on Black Caviar. They are also being sneaky by saying Maclean's rates would "only" go up by 8.4% each year over four years, when it is really an average of 9.5% due to compounding.

There are economic reasons why Grafton rates should be higher than the Valley's other communities, just like the rates in Pitt St, Sydney are higher than those in Yamba St, Yamba. For simplicities sake I'll call it "potential customer throughput".

Let's say I have a shop in River St, Maclean that sells doodads for impulsive buyers and Joe has an identical store in Prince St, Grafton. For us to both prosper we have to have a gross income greater than our total expenses, with enough left over for us to make a profit and a living. With other factors being equal the major key for success is the number of customers entering our premises.

Joe has at least five times as many potential customers as I do and they make about $70 a week more than my customers and hence have more disposable income. Also, most of my customer base has to travel to Grafton (to buy "underwear") and he has access to them too, so I have to keep my prices competitive with Joe's.

Not only that, Maclean CBD is open from 9pm-5pm, Monday to Friday (plus a half day on Saturday) and then becomes a ghost town.

This is partially due to Sundays and holidays being unprofitable because of low sales in relation to the penalty rates that have to be paid.

Internet buying is also a factor; just ask the shop owners in Pitt St. In Prince St, Joe can open seven days a week and serve enough customers at week-ends to cover the extra overhead.

We've already had businesses close in River St when shop own- ership changed and the new owners put up the rent.

Add increased power, insurance, and labour costs, which Maclean businesses may have difficulty absorbing means there are more tottering on the brink.

Putting up council rates by 38% could be the proverbial last straw.

The council is supposed to be looking after the interests of all Valley businesses.

And yes, they do need more money.

But in setting business rates they need to take into account the potential of businesses in each community to be viable.

This might mean actually raising Grafton rates and reducing the rest, but I doubt if they can comprehend the concept.

John Ibbotson,

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