I understand the distressing situation you are in and let me reassure you Labor’s priority is to protect jobs and help Australian workers, businesses, families and communities through this difficult time.
Commercial tenancy arrangements remain an ongoing concern for tenants and commercial property owners alike.
The issue of relief for tenants and owners has been considered by the National Cabinet, which is run by the Prime Minister with the leaders of Australian states and territories. The purpose of National Cabinet is to agree on a set of policy principles which each jurisdiction will implement and oversee.
I have attached the overarching principles of the Code at the end of this email.
Commercial tenancy laws are a matter for states and territories, and it will be their responsibility to legislate and enforce the agreed Code.
On April 7, the National Cabinet reported progress on commercial tenancy arrangements. You can read the statement here: https://www.pm.gov.au/media/update-coronavirus-measures-070420
More detail on the Code are found in this document: https://www.pm.gov.au/sites/default/files/files/national-cabinet-mandatory-code-ofconduct-sme-commercial-leasing-principles.pdf
Labor is examining the details of the proposal but we believe this measure is a step in the right direction.
While there are some welcome measures, Labor has raised concerns that the Morrison Government’s response lacks urgency, leaves gaps in support and does not go far enough to protect small businesses.
We will continue to push for further immediate support for businesses throughout this crisis and will also pass along your concerns to Labor’s Shadow Treasurer, Jim Chalmers.
National Cabinet made further progress on the issue of commercial tenancies. They have agreed that a mandatory code of conduct guided by certain principles will be developed and subsequently legislated by State and Territory Governments to apply for tenancies where the tenant is eligible for the Commonwealth Government’s JobKeeper assistance and is a small- or medium-sized enterprise (less than $50 million turnover).
The principles that guide the code will be:
a) Where it can, rent should continue to be paid, and where there is financial distress as a result of COVID-19 (for example, the tenant is eligible for assistance through the JobKeeper program), tenants and landlords should negotiate a mutually agreed outcome
b) There will be a proportionality to rent reductions based on the decline in turnover to ensure that the burden is shared between landlords and tenants
c) There will be a prohibition on termination of leases for non-payment of rent (lockouts and eviction)
d) There will be a freeze on rent increases (except for turnover leases)
e) There will be a prohibition on penalties for tenants who stop trading or reduce opening hours
f) There will be a prohibition on landlords passing land tax to tenants (if not already legislated)
g) There will be a prohibition on landlords charging interest on unpaid rent
h) There will be a prohibition on landlords from making a claim to a bank guarantee or security deposit for non-payment of rent
i) Ensure that any legislative barriers or administrative hurdles to lease extensions are removed (so that a tenant and landlord could agree a rent waiver in return for a lease extension)
For landlords and tenants that sign up to the code of conduct, States and Territories have agreed to look at providing the equivalent of at least a three month land tax waiver and three month land tax deferral on application for eligible landowners, with jurisdictions to continue to monitor the situation. Landlords must pass on the benefits of such moves to the tenants. In cases where parties have signed to the code of conduct, the ability for tenants to terminate leases as mentioned in the National Cabinet Statement on 29 March 2020 will not apply. Mediation will be provided as needed through existing State and Territory mechanisms.
The proposed code of conduct will be discussed at the next meeting of the National Cabinet on Tuesday 7 April.