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Northern Midlands Council fails to accept outcome of Commonwealth’s independent valuation

STATEMENT

In December, Launceston Airport issued a statement concerning a disagreement between the airport and the Northern Midlands Council about ex-gratia rates equivalent payments.

While airports that were privatised by the Commonwealth Government almost 20 years ago are not required to pay rates to their local council, they are required to make ex-gratia rates equivalent payments on all commercial assets (not including aeronautical assets). This arrangement preserves competitive neutrality between commercial sites located on-airport and off-airport and also reflects the fact that airports do not receive normal council services.

Launceston Airport has made ex-gratia rates equivalent payments to the Northern Midlands Council every year since privatisation in May 1998. Although the airport disputed the revaluation of its commercial assets in 2012, it continued to pay ex-gratia rate equivalent payments to Council for commercial sites.

Last year, the Commonwealth Government appointed an independent valuer to determine the amount of ex-gratia rate equivalent payments the airport should pay. Before the independent valuer conducted the appraisal, Launceston Airport publically committed to Council and the Commonwealth that it would abide by the findings, whatever the outcome.

 On 27 March 2016, Launceston Airport was advised by the Commonwealth of the outcome of the independently commissioned valuation and the ex-gratia rate equivalents due for the three financial years that were subject to disagreement.  As a result of this report, Launceston Airport made additional ex-gratia payments to the Northern Midlands Council of approximately $64,000, which was promptly paid on 1 April 2016.

 Since that time, Launceston Airport has also confirmed with Council that it will not be seeking a return of the overpayments made by the airport in previous years, where overpayments were made on non-assessable aeronautical sites.

Following receipt of the independent valuation, Launceston Airport engaged with Council to jointly address the outcomes of the report. It is disappointing that Council has failed to accept the independent outcome and also the opportunity to work with Launceston Airport and address the matter together. Instead, Council continues to pursue a public campaign, including the display of repetitive signage in an attempt to bring the airport’s reputation into disrepute. 

The airport’s greater concern is the impression this negative campaign leaves in the minds of visitors to Tasmania and Northern Tasmania in particular. These materials undermine the investment of state and federal governments and the airport in attracting tourism and business investment in Tasmania.  Launceston Airport believes that ratepayers of Northern Midlands Council should also be concerned at the costs involved in the Council’s public campaign, particularly in light of their disregard of the outcome of the independently commissioned valuation.

 Launceston Airport remains committed to moving forward on this matter by attempting to establish a direct legal relationship with Council through the establishment of a Memorandum of Understanding (MOU) for ex-gratia rate equivalent payments.  An MOU would provide agreement on those areas of the airport subject to valuation and the adopted methodology for valuing these sites to determine the ex-gratia rate equivalent payments due to Council as required under its lease agreement.

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For further information contact: Launceston Airport - (03) 6391 6222

 

Airport Newsletter

Launceston Airport

PO Box 1220, Launceston

TAS Australia, 7250

P (03) 6391 6222 F (03) 6391 8580

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