Commercial Tenancy Relief Scheme Bill 2021 – Second Reading Debate
Ms ADDISON (Wendouree) (15:58): I am very pleased to rise to speak in support of the Commercial Tenancy Relief Scheme Bill 2021, which provides both commercial tenants and commercial landlords with protection and support in navigating the continued impact of COVID-19. It is always a pleasure to follow in the footsteps of the member for St Albans. I often stop in Sunshine for some great Vietnamese but I am yet to venture into St Albans on my way home, but now if it is good enough for Postcards, I will very much forward to it. When you think that St Albans has been described as having good people, good food and good experiences, of course they would have a very good MP. What a great contribution you have made.
I would like to start my contribution by really thanking the Minister for Small Business. She is a member of my electorate. I am happy to represent her in this house, as she does such great work in the other place. I would also like to thank the Minister for Industry Support and Recovery, as well as their very hardworking ministerial officers and the Department of Jobs, Precincts and Regions for the work they have done to bring this bill to the house and for the stakeholder consultation that has occurred. I am looking forward to talking about what this bill means to my community in terms of the many, many local businesses that have reached out to my office to talk about the issues they are facing during COVID and the welcome and the relief they felt when this announcement was made. Ballarat has many fantastic household names, big businesses like McCain—
Business interrupted under resolution of house of 3 August.
Ms ADDISON (Wendouree) (18:02): Stakeholder consultation has been so important in the development and delivery of this significant relief scheme. We have listened firsthand to the business operators about their concerns, their financial challenges and the enormous stress they are under. We have heard what is keeping them awake in the middle of the night. We know that times are very tough in these local businesses, and that is why we are introducing the Commercial Tenancy Relief Scheme Bill 2021.
I, like so many members in this house, particularly Labor members, have great relationships with my local small business operators and with their chambers of commerce, and I am in constant contact with businesses across my electorate—and even more so with the challenges of the past 18 months. I am speaking to members of the hospitality industry and the beauty industry. I speak weekly with retailers, manufacturers and service providers, and most importantly I listen to what is going on in their businesses and to their highs, their lows and everything in between.
With regard to this bill and to making sure that those voices have been heard, I am very pleased to see high levels of stakeholder engagement with the Shopping Centre Council of Australia, the Property Council of Australia, the Law Institute of Victoria and the Franchise Council of Australia and the Australian Retailers Association, amongst many other stakeholders, in the course of developing this legislation.
I wish to especially recognise the efforts of so many commercial tenants and landlords who have already negotiated fair rent relief through this pandemic. They have been assisted in many instances by the good work of the Victorian Small Business Commission, who to mid-July had received almost 18 000 COVID-related inquiries and finalised over 3000 disputes under previous iterations of this scheme. I am heartened to see the support provided in different ways by so many individuals and organisations in backing our Victorian businesses.
I would like to just give a bill overview now, and in line with the previous commercial tenancies relief scheme, this bill will work in a number of ways to provide commercial tenants and landlords with a framework for reaching good-faith agreement on rent relief. The eligibility criteria of previous schemes had to be updated now that the commonwealth government has withdrawn the JobKeeper support that many businesses relied upon to weather the early pandemic.
This bill will provide for proportionate rent relief, with a business’s rent reduction in proportion to that business’s reduction in turnover, and of the amount reduced at least half must be waived and the remainder thereafter deferred. Eligible businesses who have already accrued deferred rent may also pause repayments if they still require relief.
Therefore, to be clear, under these provisions an eligible business with turnover at 60 per cent of their pre-pandemic levels can only be charged 60 per cent of their rent, and their landlord can only defer as opposed to waive a further 20 per cent. This bill will also legislate a ban on rental increases for eligible commercial tenants as well as implement a moratorium on evictions occurring prior to mediation with the Victorian Small Business Commission. To that end, free mediation will also be funded for eligible commercial tenants and landlords.
So what is the funding behind this important scheme? The Andrews Labor government are backing up these measures with solid financial support. One hundred million dollars in funding will be provided for reductions of up to 25 per cent in land tax to commercial landlords doing right by eligible tenants. This is in addition to the $20 million funding for payments to small landlords who can demonstrate acute eligible hardship as well as the $3 million for the Victorian Small Business Commission to fund the anticipated increase in demand for their mediation skills and services.
So in terms of the applicability of this, businesses eligible for this scheme will be those small and medium commercial tenants with yearly turnovers under $50 million who experience at least a 30 per cent reduction in turnover due to the impact of the COVID pandemic. In terms of dates of operation, importantly this legislation will be backdated to 28 July this year, with regulations to operate until 15 January next year, giving businesses clarity and consistency as we move towards a post-pandemic world.
It should be noted that eligibility is not limited to businesses whose operations have been directly restricted under these lockdowns. If a business could still open but has seen turnover decrease due to the indirect impact of lockdown, such as fewer customers coming through or lower customer demand, then that business is just as in need of support.
One example that I heard was a fruit juice bar operating in a food court in a shopping centre but with no other retail shops open. So their business has been severely impacted by the lack of other businesses being open in that food court, whether it be at Ballarat Central Square or whether it be at Chaddy or Fountain Gate. There will be special arrangements for recently established businesses so that entrepreneurial Victorians who have embraced innovation and opportunities during these difficult times can still access the support that they may need.
All of this is on top of the Victorian Small Business Commission, which will continue to make its dispute resolution processes available to businesses needing assistance navigating rental disputes, with further avenues available via VCAT and the courts.
This bill before the house builds upon the existing avenues to provide additional support commensurate with the unprecedented impact of the pandemic. The Commercial Tenancy Relief Scheme Bill 2021 joins a host of other support measures provided by this government over the past 18 months. As the minister mentioned, this includes over $7 billion in direct economic support to businesses during the pandemic, with more than $1 billion of that over the past few months.
I know there has been an enthusiastic uptake of these measures in my electorate of Wendouree. Looking at the statistics back to November last year, I know that the first two rounds of the business support package approved applications from over 2500 businesses in my community, on top of tax relief provided to 382 Ballarat businesses. Our support has continued in the months since, and we will continue to back local businesses across Victoria. To that end, I encourage any businesses operating in Wendouree to investigate the state government programs available to them and approach my office for any information or assistance, and we will continue to support Ballarat as we move forward.
The most recent lockdown has been critical in preventing the devastating spread of COVID in Victoria. By going early, short and sharp, we have been able to open up much sooner, and while some restrictions remain in place to protect our health, they are only those which are strictly necessary, and customers have been able to return to Victorian shops and restaurants. I must admit that I went out to a restaurant in Ballarat on Saturday night, and it was terrific.
Mr Staikos: Which one?
Ms ADDISON: Moon & Mountain. While this period has been tough on all Victorians, it has been particularly tough on businesses and those in our communities who own and run them. This is why I urge everyone in our state to shop locally, to buy Victorian and to give back to those local businesses that have helped maintain our collective good health.
This is a very important bill, and not only for my community. In my community, out of interest, over 97 per cent of the more than 9000 businesses in Ballarat are small businesses. When we talk about small businesses, we are talking about less than 19 workers. Thank you to everyone for doing this. I commend the bill to the house.