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The City of Darwin has accused Darwin International Airport (DIA) of stiffing the council on more than $1 million in rate equivalent payments.
In a statement to NT News last week, a council spokesperson said that the airport is “required to make a financial contribution to the city in lieu of rates on land which is subleased to tenants, or land on which trading or operations are undertaken”.
While airports on leased Commonwealth land, such as Darwin, are not required to pay council rates, different rules for “rates equivalent” are meant to ensure non-aviation activities on airport land are not given an unfair commercial advantage over other businesses.
“Darwin International Airport complied with this requirement under their lease for many years, however following a change of leadership they stopped meeting their obligations,” the spokesperson said.
“Several payments of nominal amounts have been made, however, $1,070,784.22, including interest as at April 23, 2024 is still owing.”
According to the spokesperson, the airport makes use of the city’s assets paid for by ratepayers, including the stormwater system and the ratepayer-subsidised Shoal Bay Waste Management Facility.
“To recoup the debt would be the equivalent of a 1.4 per cent rate rise to residents and be unfair to local businesses not on airport land which do pay rates,” the spokesperson said.
“City of Darwin has engaged with the Darwin International Airport for over three years on this matter and will continue to attempt to engage with the airport to seek payment and resolve this matter.”
The airport’s owner, Airport Development Group (ADG), has hit back, saying that the council “does not provide the same services to the Darwin Airport precinct as it does to other ratepayers”.
“None of roads and road maintenance, street lighting, curbing, footpaths, waste removal, gardening maintenance and landscaping are provided by the City of Darwin. This is done through contracts DIA award to local companies,” ADG said in a statement.
“All of these costs are borne by the various businesses in the DIA precinct and, when combined with City of Darwin’s claim for full rates, results in these businesses being materially worse off than other businesses within the City of Darwin.”
According to ADG, the airport has been in discussions with council for several years and “seeks the same outcome as contained within the Act – commercial neutrality (i.e. a level playing field independent of whether businesses are on or off airport)”.
“DIA has offered to pay the full rates to the City of Darwin, exactly as per council schedules, with council providing the same services consistent with what is provided elsewhere within the city. This was rejected,” the company said.
“DIA subsequently offered to continue to provide and engage local businesses for these services while deducting these costs off the rates to derive a ‘rates equivalent’, in line with the Act. This was also rejected.
“DIA has been making contributions towards the equivalent of rates, but not to the value the council has calculated for rate payers who receive full council services. DIA has written to precinct tenants to keep them informed. DIA does not receive any financial benefit irrespective of outcome.”
Darwin Airport last year opened a $30 million “airport resort” and released its 2023 Master Plan, which will provide a 20-year road map for land use as well as the development of new and existing facilities.
