Rates increase could 'sound the death knell' for some Cork city businesses, says former Lord Mayor

A rates increase for city traders would push more businesses towards closure, the Cork Business Association (CBA) has warned.

It emerged this week that a potential 3% increase in commercial rates is being discussed as part of ongoing discussions for the 2025 Cork City Council budget.

Former Lord Mayor of Cork, Mick Finn, said businesses in the city were already struggling to keep their heads above water and that the proposed increase in rates would “sound the death knell” for some of them.

Fine Gael councillor for Cork City South Central, Shane O’Callaghan, will table a motion at the next council meeting calling for an increase in baseline funding from central Government to help avoid the increase.

Burden

A spokesperson for the CBA said: “While we recognise the challenges the council faces in addressing the projected €3m deficit, raising commercial rates by up to 3% would place an additional burden on already struggling businesses.

“Small businesses are grappling with immense pressures from rising costs, including energy, materials, and wages.”

“A further increase in commercial rates could push more businesses towards closure, undermining the vitality of Cork City’s economy,” said the CBA spokesperson.

The association has urged Cork City Council to explore alternative measures to balance the budget without disproportionately impacting businesses.

“We fully support the call to extend the rates rebate scheme and target relief toward businesses most affected by the rising costs of operation,” they said.

“We back the appeal to the local government minister for increased funding to alleviate the financial strain on local businesses.”

Death knell

Mr Finn, an Independent general election candidate in the Cork South Central constituency, said that the rise will “sound the death knell for small operators, and must be prevented”.

Mr Finn said he believes that any gaps in the Cork City Council operating budget for 2025 must be funded by central Government and not from those businesses “trying to keep their heads above water across Cork”.

“We saw Lennox’s — a 73-year-old family business — closing lately, citing increased costs of business among the reasons for closure,” he said.

“You look at established businesses like Porter’s, Twilight News, and Con Murphy’s on Patrick St; Pigalle on Barrack St; Nash 19 on Prince’s St; and many others in the city and suburbs that have blamed high rents, soaring energy and operating costs, and trading environment changes as reasons for closing their doors.

“Adding a rate hikes to the melting pot cannot be the solution at this time.

“There has been a 35% increase in insolvencies this year over 2023, and almost 100% of those are in the SME sector.

“This does not appear to be sounding alarm bells in national or local government: Are they fixated with big business and corporation taxes?

“Central Government should be stepping up here — either increase the LPT [Local Property Tax] yield to Cork, clip the annual compensation payment from the city to the county council post boundary extension and detach it from index-linking, or use the Apple tax money to fund councils throughout the country so everyone will benefit.”