Council should consider a rates reduction

On Wednesday next, Athlone Town Council will meet to agree an annual budget. The council's draft budget proposes no change in commercial rates on local businesses - a move that has already sparked an angry reaction from some local business interests. In an unusually hard-hitting statement last week, the new Athlone Chamber president John McGrath said the council executive and members appeared to have no understanding of the severe pressure businesses are under locally. He said: "The stark reality is there are going to be more business closures in the New Year and the local authority is going to need to address its overall budget to include a reduction in rates." The chamber had sought a five per cent reduction in commercial rates, arguing that: "The council can not expect businesses to pay Celtic Tiger rates in these recessionary times. Businesses are reducing their costs, taking cuts and many are barely surviving." The Westmeath Independent has always been a strong advocate of local government and throughout the years we have advocated the strengthening of local authorities including Athlone Town Council. However, it is clear that small local businesses are beginning to fall by the wayside, due to a confluence of factors, including falling domestic spending, lack of consumer confidence and pressures of rent and rates. The level of vacant high-street commercial, retail and office units in Athlone is frightening at present. It is also in the council's own interest to seriously consider a rates reduction as there is increasing likelihood of both business failures and increasing rates bad debts. Most recent national figures are showing that five businesses are going bust every day during 2011. Indeed, in the council's own budget rate write-offs and bad debt provision have been increased from €944,000 to €1.04m to reflect the level of vacant property and the current economic climate. SLIDING PROPERTY PRICES NO SURPRISE It was hardly a surprise to anyone that the latest figures from the property website daft.ie showed house prices still sliding. But what's worrying is that the slide appears to have accelerated again, hitting 7.7 per cent nationally, and 7 per cent in Westmeath, in the last three months alone. Daft.ie has commented that some of the slowdown is related to the hesitancy on the banks to lend to those wanting to buy. But what is also a factor is people's fear over the fate of the euro. A question that has been asked over and over again as the probably demise of the currency is discussed is "What happens to mortgages?". The answers haven't been reassuring, tending to the view that if Ireland goes to the "Punt Nua", or gets a devalued euro, mortgage holders will still have to pay back their mortgages at full euro value - even though whatever savings they have will be revalued at the level of the new currency, and their wages will be in the new lower-value currency. As long as this uncertainty about the fate of the euro remains in place, people aren't going to buy houses; they're not going to buy cars; and now that the 2 per cent hike in VAT has also kicked in, they're not going to be buying big-ticket electrical items. That's just this country: the same uncertainty exists all over Europe, and, indeed, in countries that aren't even part of the eurozone, including neighbouring Britain. Unless Europe gets to sort out the currency crisis, all our economies will stagnate. And that's good for no-one.