Costs of operating a business continue to rise and, in particular, the upward spiral of electricity charges is putting pressure on bottom lines. A large factor in this equation is often the performance of the properties occupied by the business, many old and with a very poor environmental performance which translates into higher costs. The South Australian Government has been developing a Building Upgrade Finance mechanism as one potential way of helping unlock investment in building retrofits. The scheme is aimed at helping building owners access longer-term fixed-interest finance and to share the costs and benefits with their tenants or themselves of course if owner-occupiers.
To this end, the Government passed legislation in December last year to enable a Building Upgrade Finance mechanism to be established and have spent some time developing draft regulations that will actually govern how this will work and they are now seeking feedback on these. It is, or certainly should be, of interest to Local Governments as the mechanism envisages that repayments of building upgrade loans will be recovered through the rating system operated by Councils. Although participation in the scheme is proposed to be voluntary it might give rise to some interesting issues when a landowner wishes to use the scheme but their local council hasn’t signed up.
[bctt tweet=”Should @propertycouncil @LGAofSA & @CityofAdelaide support #Building Upgrade #Finance scheme, asks @McnishNeil?” via=”no”]
In principle, I suggest that improving the efficiency of industrial and commercial building stock is a good thing and the Property Council has been a strong advocate with both the Local Government Association and Adelaide City Council having given in-principle support. I think it is important that as wide an audience as possible has a look at what is proposed and in particular councils review what it might mean for them. To this end, further information and access to all the consultation papers together with a useful factsheet can be found at the Your SAY website following this link, http://yoursay.sa.gov.au/decisions/yoursay-engagements-building-upgrade-finance/consultation-papers
Consultation closes on 13 January 2017 so not that much time!