Wollongong City Council has voted to halve developer contributions for new hotels, a move that will see the council forgo millions of dollars in revenue, according to Councillor Kit Docker. The decision was made during Monday night's council meeting as part of the city-wide developer contributions plan.
Under the new plan, the contributions levy for new hotels will be reduced from 2 per cent to 1 per cent, intended as an incentive to encourage hotel development. Councillor Docker moved an amendment to retain the 2 per cent rate, warning that the reduction would shift costs onto the council and community. “If we cut these contributions, those costs don't just simply disappear, they will simply shift back onto council and the community,” he said.
However, the amendment received little support. Councillor Ryan Morris argued that the council needed to act now to stimulate development. “We need to get something moving and any incentive we can get to get hotel and infrastructure moving and tourism, we should apply for now,” he said. He added that the 2 per cent levy could be reintroduced later, and that the council would benefit economically once hotels are operating.
Councillor David Brown noted that the levy cut might lead to hotel construction that otherwise would not happen. “Take for example a theoretical construction with a $1 million contribution, under the assistance for a hotel, we get $500,000. So you might think we've lost $500,000. But if the hotel gets built because of the incentives, we're half a million dollars better off,” he said.
Councillor Dan Hayes dismissed concerns about infrastructure funding, calling them “scaremongering.” He said the status quo was not working and that the council needed to try something different. Lord Mayor Tania Brown highlighted the importance of hotels for events like the World Triathlon, stating that the incentives were a strategic lever to attract investment.
The original motion to approve the new developer contributions plan was passed 10-3, with Councillor Docker and the two other Greens councillors voting against it.
