PUNITIVE TAX WILL FURTHER DAMAGE FREMANTLE’S ECONOMY
The Fremantle Herald recently published a story related to AirBnB (7th July ’18) which suggested Fremantle Council may have been pressured by hotel industry lobbyists to levy a rates surcharge on small accommodation rentals.
That punitive tax, which raises only $35,000, will inflict further damage to the city’s battered economy. Another levy on small business will not help the city or its retailers out of their financial crises and it’s doubtful it will help the ailing hotel market.
Visitors who choose to stay in AirBnB establishments may do so because they prefer not to stay in hotels. The offering of comfortable home accommodation to visitors is not necessarily a great deal cheaper than a hotel. Some travellers, often couples or family groups, may have been attracted to visit the city for something other than another festival but simply to enjoy the sights, the variety of restaurants and cafes and also the remaining retailers. Any saving in relation to accommodation costs frees up expenditure for enjoyment in other city attractions.
Hoteliers have a vested interest in encouraging guests to patronise hotel facilities which frequently include restaurants, cafes, spas, bars and small retail outlets. Visitors’ money spent in a hotel’s in-house attractions is detrimental to local businesses.
Retailers in Fremantle’s West End who offer a variety of particularly funky shops are already paying elevated rates, ostensibly to be used by council to promote their businesses. That differential rate levy , originally established to support the BID scheme, has been diverted to a hand picked Destination Marketing committee by the cash strapped council.
One AirBnB operator, Alison Roberts, told The Herald: “All Airbnb and Homeaway owners already use their websites to promote Fremantle as a destination, recommending local eateries, tourism operators, retail outlets and artists”.
TAX CONCERTS INSTEAD
It would have been expedient and a greater revenue raiser for council to levy music festivals and other large scale ‘visiting businesses’ such as Winter World. Minutes from a SW council indicate Sunset Events festivals in their region were levied $20 a ticket. That’s not done here presumably because it was never considered or, as the Mayor publicly demonstrated, one of the Sunset company directors, David Chitty is a ‘mate’ of his. Also a Chitty family member placed considerable funds into the mayor’s election campaign.
A $20 per ticket levy to a music festival which attracts 10,000 patrons would raise $200,000 for council. Even a smaller festival of 2,000 patrons would raise $40,000, considerably more than the Council’s punitive impost on the AirBnB businesses.
Most companies who operate festivals and other events are not based in Fremantle. They arrive, utilise the city’s amenities, make truck loads of money, and leave. Festival patrons add little to the city’s retail businesses other than to booze barns, cafes (and possibly drug dealers). They also leave expensive clean up liabilities.
AirBnB hosts offer friendly alternative accommodation services to the city. They attract people who may have responded to the council’s revised Destination Marketing program which, by coincidence, has hoteliers on its advisory board in addition to Chris Lewis. Lewis is the spin doctor who was instrumental with a few members of the G4F group, including Councillor Sullivan, in organising fundraisers for Brad Pettitt’s mayoral campaign.
ELECTED COUNCILLORS SHOULD ASK “DO THESE CONNECTIONS INDICATE CRONY CAPITALISM?”
Lewis’s company, LewiCorp PLC, was paid $22,000 by Fremantle Council for ‘Strategic Services’ rumoured to have been connected to the Keep Dockers in Fremantle campaign spearheaded by Lewis and his confrère, former WA Inc Premier Peter Dowding.
Lewis, Dowding and Pettitt appeared unworried that to retain the team in the city would cost city ratepayers in excess of $100,000,000. The campaign failed as did Lewis’s attempt to gain a position on the Dockers’ board.
Fremantle has a Council, many of whose elected members appear to be unwilling or incapable of thinking outside The Square but apparent respond to pressure from ‘mates’ in business or those who facilitate and lobby on behalf of businesses, including developers. It could be Crony Capitalism at its worst, a reflection of the corruption endemic during the governments of WA Inc. It is becoming clear that councillors should investigate who is behind the scenes, driving the city and advising the Mayor and some colleagues.
Crony Capitalism is defined as: “An economic system characterised by close, mutually advantageous relationships, between business leaders and government officials.”