Levy puts brakes on car parks Author: By MICHELLE DRAPER Date: 23/08/2006 Publication: The Age
MELBOURNE CBD car parks are already hundreds of thousands of dollars out of pocket because of the State Government levy on car parking, operators say.
Wilson Parking chief executive Craig Smith said the $400 levy on long-term spaces - designed to reduce peak-hour congestion - had increased costs.
The levy, introduced in January, will double next year, generating $38.5 million.
"We've not been able to recover from the users the full amount of the levy," he said. "We are hundreds of thousands of dollars out of pocket.
"We had to drop rates to keep patronage. In a lot of cases the all-day rates are cheaper than when the levy was introduced."
Secure Parking's Victorian manager Steve Smith said the tax had been passed on to clients and patronage had fallen by up to 15 per cent, but operators still had to pay the same rent.
Secure Parking's Mr Smith said car park owners could find their properties worth less as patronage and revenue declined. Wilson Parking's Mr Smith said rents and returns would eventually drop.
But Colliers International investment sales executive Mark Wizel said he did not believe the levy would affect car park values. He said he had had more than 80 inquiries for a car park at 601 Collins that later sold, achieving $45,000 a bay.
"The demand has been unprecedented," he said. "Purchasers are not deterred by the levy. However, they are cautious and take it into consideration. Given the genuine lack of stock, people are still desperate for opportunities for the freehold component of a commercial car park."
Property Council of Australia executive director Jennifer Cunich criticised the levy in a recent issue of the organisation's magazine.
"The budget presented a chance to eliminate this silly tax," she said. "At the very least, the Government should have capped it at $400, pending a review. Instead, they have arrogantly decided to press ahead."
The Liberals say they will scrap the levy if they win the November election.
A spokeswoman for Treasurer John Brumby said there were no plans to change the increase in the levy. She said the Government would review the levy after 12 months, with another review three years later.
She said there was evidence fewer people were driving into the city. Information from other states with a levy showed demand for long-term spaces had fallen and the Government expected a similar outcome for Melbourne, she said.
KEY POINTS
? City car parks are losing thousands of dollars because of the levy on congestion.
? There are fears rents and returns will eventually fall, affecting property values.