- Property Council has labelled the move as a "highly interventionist policy"
- Says it is inappropriate given high vaccination rates and "living with the virus"
- Property industry has given over $15 billion to tenants since pandemic begun
The property industry body has expressed disappointment in the New South Wales government’s decision to extend the Commercial Code of Conduct, leaving commercial landlords worse off.
The NSW division of the Property Council of Australia (PCA) has criticised the “highly interventionist policy” arguing it was not fit-for-purpose given vaccinations rates at 95% and no lockdowns were occurring.
“It is remarkable that NSW is now seemingly the only jurisdiction in the country continuing this practice of intervening into private contracts – particularly given the Government’s strong commitment to live with the virus and promote the state as a place to invest,” said NSW executive director Luke Achterstaat.
“This decision should be seen for what it is: government intervention into legal contracts and a compulsory transfer of income from one business to another.
“Such radical measures are not what ‘living with COVID’ is supposed to be about.”
In particular, Mr Achterstaat was critical of the one-size-fits-all code which he reiterates create more administrative burden for all stakeholders – including the government themselves.
“Further regulation simply brings red-tape through higher compliance costs when many negotiations are already underway, and many deferred rent amounts are still outstanding.”
The Small Business Commissioner said in a statement the rent relief has now been extended to 13 March 2022.
Eligible business are those with a turnover of less than $5 million, and who have experienced a decline 35% or/and those who wouldn’t have met the eligibility for state government’s Jobsaver or microbusiness grant programs.
Landlords will be required to negotiate rent relief with eligible commercial and retail tenants. As it guide, it should be proportionate with the decline in turnover, with at least 50% in the form of a wavier.
The Small Business Commissioner noted that landlords can access the Commercial Landlord Hardship Fund, which allows small commercial or retail landlords to access up to $3,000 per month in grants per property.
Property industry has given over $15B to tenants since pandemic began
Mr Achterstaat noted that during 2020 and 2021, the property industry and provided over $15 billion to tenants, which he said demonstrated support above and beyond the code.
Going forth, he said the code needs to be called out as the country learns to live with the virus.
To be clear, this measure is not government support but government intervention into commercial contracts. It is the legislated transfer of income between private entities.
“Property is the only private industry being legislated to support other private industry, with scant regard to the challenges faced by commercial property owners themselves.”
“Governments must wean themselves off intervening into contracts as the panacea for problems caused by government-imposed lockdowns and restrictions.”
“With international capital more mobile than ever, NSW needs to present a credible environment for business, and government intervention into commercial contracts only undermines that investment proposition.”
