Wednesday, 4 August 2021

Commercial Tenancy Relief Scheme Bill 2021

Second reading

Debate resumed on motion of Mr PAKULA:

That this bill be now read a second time.

Mr EDBROOKE (Frankston) (14:58): It has been very interesting hearing members from either side speak on this bill today, the Commercial Tenancy Relief Scheme Bill 2021, which is of course a scheme re-established to acknowledge that while we have made some progress, there will continue to be challenges for businesses in coming months—and we know that. Anyone who has a sense of reality, anyone who has their finger on the pulse as far as indeed what is going on in New South Wales and how quickly one case can turn into so many in other states and has their finger on the pulse of the vaccine rollout, must continue to realise that we have got to carry on this vital work to support small business in our community until this COVID crisis is well behind us. And even then we have to ensure that we are running a program and delivering a system that can ensure that we are not surprised by these kinds of circumstances again and ensure future growth and opportunities in our beautiful state of Victoria.

From the outset there have been a couple of things I have heard today from those opposite. One would be that the Liberal-Nationals are the party of small business. Another one would be that Labor do not know small business. I had a look through some of the lists, and certainly I would almost put out there that there would be more people who have run small businesses and are now democratically elected to represent their communities on this side of the house. That would include me. I come from a family of small business as well. There are a ton of people on this side, so we really need to stick to the facts a little bit around that. There are plenty of people on this side of the house that actually know the struggles of running a small business and who have a deep empathy with the trauma and the hardships that COVID-19 has put onto our community.

Indeed on the party that ‘stands for small business’, I believe, I guess if we followed what they were saying and what their policy was around COVID, which was to open up, we might indeed find ourselves in a similar situation to New South Wales now, where the not locking down hard enough situation has led to an extended lockdown. Economically it is going to cost New South Wales more than it would have originally. I guess the health advice might be different between New South Wales and Victoria, but we certainly followed our health advice on that.

Now, this past year has obviously presented a huge amount of challenges—indeed the last 20 months—and I would like to go on the record as just stating that I appreciate every small business owner in my community, whether it be people running carpet-cleaning businesses or cafes or people mowing lawns, any business in fact that has done it tough or has had to think outside the box and recreate ways of doing things. I mean, it was not that long ago that I had never heard of a make-your-own pizza that comes in a box with the dough and the ingredients. It was not that long ago that I had never even used something like Uber Eats for some of the businesses in Frankston and on the peninsula that never really provided that service. It was not long ago that we did not have all these other options where people have been innovative and have changed very, very quickly to cater for these fairly dramatic circumstances that we had never been able to even imagine happening before.

Ms Ward: They have done amazing things.

Mr EDBROOKE: They have done amazing things, member for Eltham. So I want to put on record my thanks to them. I know through speaking to businesses and families every single day that especially now they do understand why these lockdowns were necessary. Sometimes it is very easy to be drawn in by the popular media, who will obviously be critical, as they should be, of government decisions and examine them and ask questions about them, but certainly with what is happening interstate right now there have been quite a few people I have spoken to who have said, ‘Yes, we get it’. It would not really matter the colour of your government; it is how your government reacts.

Indeed, I spoke to a gentleman with a small business recently who has always been a lifelong Liberal voter, and we get along really well. I have known him for a very long time, and he said, ‘I’m going to move to New South Wales’. He said that about two months ago. Our last conversation was last week, and I said, ‘How’s that move going, mate?’. He said, ‘No, I totally understand what’s going on now. I won’t be moving to New South Wales. I think we did it relatively well down here. It’s a very hard situation, and I’ve got my head around it now. I understand why we had to close down. I understand that if we didn’t close down and we had these superspreading events—if we didn’t contain the virus—we would be killing our customers and we would lose more money’.

Ms Ward: We are listening to the health advice.

Mr EDBROOKE: Yes, that is right—listening to the health advice. So it has been very challenging, but I do thank those people. Despite the impact of this pandemic, I am really amazed at the resilience and the innovative way that people managed to operate their small businesses. Many in Frankston have actually managed to grow a different arm of their business or move their business in a way that they probably had not foreseen before they were almost forced to by COVID. In fact in the year to June 2020, over 19 000 net new small businesses were created in Victoria—the highest number of any state or territory—and there have been so many stories of growth often over the past year built out of this adversity, which is quite amazing.

But unfortunately, despite this resilience, many of Victoria’s small businesses are not yet out of the woods. Victoria and the world continue to grapple with the challenges of the pandemic, and the government understands the profound effect that successive but necessary lockdowns have had on small businesses. Victoria’s small businesses deserve our support, of course. They are the lifeblood of our state, and over the past year I have stood in this chamber many times speaking about small businesses and in support of the Victorian government’s program of initiatives to provide small businesses assistance through those successive waves of COVID. We have provided over $7 billion of direct economic support to businesses over the course of the pandemic, including more than $1 billion in the past few months. Our commercial tenancy relief scheme has played a significant part in helping many small businesses survive to this point, providing a strong framework for small commercial tenants and their landlords to negotiate rent relief.

This was, as you know, a huge issue with the inception of COVID, with some landlords I think doing the right thing, realising you do not throw the baby out with the bathwater, but other landlords unfortunately not really seeing the forest for the trees with that one. Many are still trying to balance the lockout restrictions with having to pay deferred rent, and they will in the future, while in many cases landlords and tenants are negotiating in good faith. As I have said, we are also aware that this is not happening on every occasion and in every instance that it should. This bill enables regulations to be made to reintroduce a commercial tenancy relief scheme. The scheme will apply retrospectively from the date of the announcement, and this temporary legislation will be repealed on 30 April 2022. As announced, the commercial tenancy relief scheme will operate from 28 July 2021 to 15 January 2022. Similar to the previous scheme, the 2021 commercial tenancy relief scheme will provide support to small businesses with a turnover under $50 million that have suffered a decline of at least 30 per cent in their turnover. With the commonwealth government’s JobKeeper program no longer in place, tenants will be able to demonstrate their eligibility by providing a standard letter from their accountant, which should be a fairly simple and quick process to ensure that people get the relief they need immediately.

The scheme will provide protections for many small businesses, with landlords not able to evict a tenant for non-payment of rent unless the parties have attempted mediation. Whilst it is the government’s expectation that tenants will continue to meet their rental obligations where possible, as common sense would tell us, a commercial tenant may not be evicted for non-payment of rent without first attempting mediation through the Victorian Small Business Commission. Rent increases will also remain suspended during that extension. It is common sense, and it is of course legislation that is welcomed by small businesses in my own community of Frankston. It is our expectation that most commercial tenants and landlords will continue to work together, as I think most have been, and they will reach agreements that best assist the ongoing survival of businesses—to have that tenant in there and not lose tenants, because that would be counterproductive as well.

Overall, this is a commonsense bill. It is a commitment that was made by this government to assist small businesses. We are a party that supports small businesses. We are a party of some small business owners; there is no doubt about that. It means nothing to stand up in this house and just run the same old mantras and the same old taglines. What actually helps our community is legislation like this that is introduced. Will it help everybody? No, but there are also federal government responsibilities and other schemes that can help people as well, which have been well aired in our community. I certainly support this bill, and I commend this bill to the house.

Ms CONNOLLY (Tarneit) (15:08): It gives me great pleasure to rise to speak this afternoon on the Commercial Tenancy Relief Scheme Bill 2021. I have this big sigh because, like the member for Caulfield, I feel like I have been having this conversation with my local businesses—and local landlords, mind you—around the need to provide small business with certainty going forward. It is a conversation I have been having for the past two weeks. So when I got the call and found out that we were going to go ahead with this bill to enact the legislation and provide the scheme that will give relief and certainty to our local small businesses when it comes to paying their commercial rent, I was really happy and relieved, to say the least. This bill is about providing relief to some of our hardest hit businesses right across Victoria, and there are a lot of them at the moment, and helping them cope with the uncertainties caused by COVID as we race—yes, it is a race; it is a big race—to get vaccinated.

I do want to take this opportunity to again—I know many, many members of this house on both sides have stood up here in this place again and again to do this—thank small businesses for doing the hard yards. As the Acting Speaker, the member for Oakleigh, said earlier today, the businesses that closed helped protect our community. They have done an outstanding job. It has not been without sacrifice, and their hardship and their sacrifice are something that every single one of us here and right across Victoria acknowledges. We say to them again today, and I say to them: thank you for keeping our community safe.

Victoria has been able to show the world again how to stop an outbreak of this virus, and the very dangerous and fast-moving delta variant at that. I would like to encourage my community to go ahead and offer again their unwavering support to our local businesses in Wyndham. Having spoken to many of them, they are doing it tough. And whether you are going out and having a coffee or getting a bacon and egg brekkie burger—which I am quite partial to out in my community, with my morning coffee—I say to my community, ‘Every cent counts at the moment’. If you can, go out and spend money in our local community.

Just last week I went ahead and met with former Northern Territory senator Trish Crossin, who I have the pleasure of looking after as her local member—she lives in my electorate. Trish is doing incredible work with Council of Small Business Organisations Australia, championing the Go Local First campaign, and I would encourage all members in this house to go ahead and support that campaign and download the material that COSBOA is providing. It is free, but most importantly it is needed desperately by our local business community in getting behind them and encouraging locals to shop local.

Since last year we have known—it is obvious, you do not even need to open a newspaper; it is just common sense—that we need to get people vaccinated, and we need to do it quickly. There will never be any normal—only a COVID normal—until we are all vaccinated. Those vaccines are here, but unfortunately it has been a fight, particularly for Victoria, to get enough to get them into people’s arms, because quite frankly we do not have enough at the moment. That is the reality. It is the reality people in New South Wales are facing. They know that until enough people can get the jab, restrictions and lockdowns—indeed restrictions and lockdowns here in Victoria—will remain our only defence against this virus.

Looking to Sydney we can see what can happen with a fully fledged delta outbreak. Despite listening earlier to the Leader of the Opposition talk about this machoistic chest beating—only really a man can refer to another man doing that—of our Premier versus the New South Wales Premier, I think it is indeed ridiculous. It is very, very sad for all of us here in Victoria to look to New South Wales and see what is happening to them, because we know how it feels. We know what it is like to look down the depths of a very dark winter.

I have family members in New South Wales. All of my family in northern New South Wales have restrictions and certainly all of my husband’s family—most of them in western Sydney—are under very strict lockdown there. The one thing that we speak about on a regular basis on Zoom is that they wish they had locked down earlier. They wish that they had a Premier that had looked to Victoria, had learned from Victoria. I think the New South Wales Premier talks about not having a handbook for this virus. Well, we were talking about that last year, and in many respects it feels like we have written the handbook. You can see that by us going ahead most recently, locking down early, locking down hard, and we got alongside and got on top of the latest outbreak here in Victoria.

One of the things that the member for Oakleigh pointed out over there earlier today to the Leader of the Opposition is that our government has invested a hell of a lot of money into small businesses here in Victoria—$7 billion. Seven billion dollars is a lot of money. It has gone a long way to supporting Victorian businesses right across the state cope with the impacts of lockdowns, and when I talk to my local businesses, I talk about surviving COVID as getting to the other side and just staying afloat. It is the same thing when I talk to my dad, who, surprise, surprise, until very recently—he is now retired—was a small business owner, a milkman. I said to him the same thing that I say to businesses in my community, ‘You just need to stay afloat. You need to get to the other side, and the government will be able to inject a significant amount of funding into the economy to kickstart you and kickstart you quickly again’. It is the same advice I am giving my brother-in-law in New South Wales right now with his construction business about to go under—that you need to stay afloat. And the government will give you grants here and there as we go along. It is not something you are going to make a big profit off, but it will keep you afloat so you are left standing on the other side once we are all vaccinated and we are out of this thing.

I have spoken to so many local businesses in my community, like many members have in this place, and most of them understand. They understand, and they accept. They do not like it, but they understand and accept, especially now they can look to New South Wales and see what is happening there. They understand the need for these measures, these lockdowns. What they have been asking me and they are asking our government for is a sense of certainty—to give them certainty that when these restrictions need to be put in place and when we need to lock down again they are not at risk of falling through the cracks, and that is what this bill does. This bill helps to prevent that by providing much-needed rental protection so that small businesses are not going to fold. They are not going to go bankrupt and have to close their doors, because whilst a lot of businesses might not incur non-recoverable costs during lockdown, they still lose out because they still have to pay their rent.

There is a local business that comes to mind—a booming coffee shop, I will say—in Pacific Werribee in Hoppers Crossing. I do not need to tell anyone here that if you are renting in what is quite a large, popular shopping mall, you are probably paying an arm and a leg in rent. You need to sell a lot of coffees and a lot of meals to cover those overhead costs, and with everyone at home during lockdown recently and avoiding large spaces like Pacific Werribee it goes without saying that this local business—and yes, it is run by a husband and wife, a local family—and cafe took a really large drop in sales. They reached out to me, and they said, ‘Thanks for the grants that are coming through from your government, but what we need is some kind of certainty around rent, and the rent is killing us’. So when I got the call that we were going to go ahead with this bill I immediately made a phone call to that couple, who were absolutely delighted and relieved to hear that we were going to go ahead and enact this legislation, with some amendments to what we had previously. But I say to that couple—they know who they are—your advocacy, your voice, has mattered in this conversation. We listened as a government and I listened as your local member, and the minister heard you and has gone ahead and enacted this legislation. So it is for those reasons and for those thousands of families in my local community that I wholeheartedly commend the bill to the house.

Mr SCOTT (Preston) (15:18): I rise to support the Commercial Tenancy Relief Scheme Bill 2021. I will make a few comments more generally about the COVID pandemic and then come to the provisions of the bill. I think it is important to understand the bill is reintroducing, in effect—though with some modifications relating principally, as I understand it, to the changes in federal provisions with an absence of JobKeeper in the current circumstances—the pre-existing commercial tenancy relief scheme arrangements. This has been undertaken obviously in the present circumstances whereby the pandemic is in many ways accelerating around the world with the delta variant, and I know there is some degree of apprehension about the lambda variant, which has arisen in South America, and the continuing evolution of the virus. There has been a significant amount of death. In fact it is likely that there will be a greater amount of death subsequent to the discovery of the vaccines which are now being rolled out across the world than in the previous period.

If you look to places like India, there are not yet completely reliable estimates on the number of persons who died in the recent significant delta outbreak, but the likelihood, based on some information—I note the paper was published in the New England Journal of Medicine—is probably something like 2 million-plus people died within a period of about two months. That gives some insight into the sort of level of death, which really in many ways has not occurred prior, except in the period of the Second World War, and certainly not in my lifetime—and it is accelerating. If you look to Indonesia and a number of other countries around the world, the pandemic is in an accelerating phase. That is not surprising when you consider that the reproduction number, unmodified, the so-called R0 of the delta variant, is estimated between 5 and 8, and 6 is often used as an estimate of that. That is more than twice that of the original Wuhan strain. So there is a period now which obviously has created significant risk to Australia and made the capacity to suppress viral outbreaks more difficult. Hence in those circumstances there is a greater need to respond in order to protect the interests of businesses, particularly small businesses, which have borne a significant weight of the burden of the actions that have been taken to protect human life during this period.

The scheme that is being introduced is to support commercial tenants and to provide subsidies for landlords who are in these circumstances. The scheme includes proportionate rent relief. The example given is where there is a decline in turnover of a certain percentage, they can only be charged a proportion of the rent comparable to the amount of turnover lost. There is also a ban on rent increases, a moratorium on evictions for eligible tenants without first undertaking mediation through the Victorian Small Business Commission, and a mediation service for commercial tenants and landlords to support fair tenancy negotiations.

There was an announcement made with the federal government. As has been noted previously, this built on around $7 billion in total now of support for business relating to the pandemic. The scheme will operate until early 2022, and it was introduced retrospectively, commencing with its announcement on 28 July 2021. It is to remain in place until 30 April 2022 to be precise. It is to support small and medium enterprises with an annual turnover below a threshold of $50 million who are able to demonstrate a decline of at least 30 per cent of that turnover due to the impact of COVID-19. Such specifics are to be implemented through regulatory instrument. That was critiqued, I think, by the Leader of the National Party, but of course it is quite normal in such circumstances to use regulatory instruments sitting above subordinate instruments to legislation.

There is a significant issue, obviously, for small and medium businesses. I, like many others, have spoken to small businesses within my own constituency that I am lucky enough to represent. There is no doubt that COVID has been a particularly trying time for many small businesses. While there are some businesses whose business models have been particularly suited to the period of COVID, that is not true for the vast majority of small businesses. As has been noted by previous speakers, many such businesses have invested, in fact risked, their principal asset—often their home—in order to obtain a loan to start a small business. So it is important that support be provided, and the rent for commercial premises is one of those costs which many small businesses cannot avoid. The scheme will provide support for businesses which have a reduction of turnover due to COVID and reduce that rent burden, and it will allow many small businesses to survive this period of the COVID pandemic.

It is important to note, I think, a supposition that I have—and it is yet to be seen exactly how the world will be in 2022 or 2023—about elements of the changes wrought by the COVID pandemic, particularly in relation to infection control. As a former minister responsible for WorkCover I know there are a range of legislative obligations on all businesses and indeed employees as well relating to infection control and avoiding workplace injury, and if COVID remains within society and is an illness which can injure individuals, and there is a reasonable risk, reasonable steps must be taken to protect individuals.

I think it is also important to note that COVID is not the flu, and people who make such a false equivalence demonstrate their lack of understanding of the significant issues related to the disease. To give a couple of examples, there is the recently released study in the United Kingdom on cognitive impairment, where people undertook a prior cognitive test—tens of thousands of persons participated in the study—and those who had had COVID exhibited declines in their cognitive capacity. If you had been admitted to hospital, from memory, that was equivalent to 7 IQ points, and it may have been 12 if you had been ventilated. Now, that is a very significant cognitive impairment. And perhaps even more concerningly, even those who were mildly symptomatic, even some who had very minor symptoms, had measurable average cognitive impairments. The evidence is starting to accumulate that even mild cases of COVID can result in cognitive impairment, and the initial evidence suggests that this may be permanent.

So the idea that COVID is simply the flu and that the flu paradigm applies and somehow you either die from COVID, you go to hospital or you get better is in fact ignoring the potential long-term consequences. There are also studies about heart damage and there are also studies about other organ damage, lung damage, that indicate that COVID is not a disease that can be simply characterised as being somehow analogous with the flu or other seasonal viruses that we may face. This is a significant issue into the future, and businesses may have to deal with these issues for a significant period of time. It may be necessary for people to take action over a period of time to ensure that businesses are safe from the risk of transmission of COVID for workers, the business and customers of those businesses.

Returning to the aspects of the bill, there are transitional arrangements where tenants and landlords have arrangements in place to negotiate under the previous commercial tenancy relief scheme. Tenants must continue to make genuine efforts to pay the rent that they agreed to under their original commercial tenancy relief scheme. It is also important to note that new applications for rent relief must be submitted and eligibility criteria met with relation to this iteration of the scheme and that eligibility for the previous scheme does not create an automatic right. So there are steps that must be taken by businesses, and it is important to note that as a part of this scheme.

There are limitations, obviously, on the eviction for non-payment of rent that are involved in this scheme. However, landlords can still evict tenants in breach of their lease for other reasons, so there is not an unfettered right for tenants to remain in a lease regardless of their behaviour. There is an $80 million hardship fund established for landlords who provide rent relief to their eligible commercial tenants, and I think this is an important step. I note that was part of the joint announcement made with the federal government—something the federal government was happy to be associated with despite some of the comments made by the members opposite.

I commend this bill to the house. It is an important step to provide support to small businesses who have dealt significantly with and borne much of the burden in the community that I represent and across Victoria, and it is part of an ongoing commitment totalling approximately $7 million of support for business from this government.

Mr FOWLES (Burwood) (15:28): It is my pleasure to join the member for Preston in making a contribution on the Commercial Tenancy Relief Scheme Bill 2021. It is an important bill, as many speakers before me have canvassed, and it is a bill that is urgent too, because it is a bill that addresses the very real struggle facing so many in the economy right now. And whether you are in lockdown in Brisbane or in lockdown in Sydney or have recently been locked down in Melbourne, what we do know is that this pandemic is national and global and that the only way to get numbers effectively under control is to lock down, to allow contact tracers to get on top of it and to make sure that the health of the population is protected in order to protect the economy.

That of course has very serious ramifications, particularly for a couple of sectors which I have personal experience in, and they are the hospitality and events sectors. These are sectors that I think Melbourne justifiably has a well-earned, important international reputation in. We do hospitality really, really well in this city. We do events really, really well in this city. It has been an extraordinarily difficult period for so many operators in these sectors as they have had to come to terms not just with interruptions to trade but also with changes in work patterns.

Even during those periods of sunshine in the last 18 months where we have had people returning to a COVID-normal way of life, we have seen that there are now systemic changes to the economy. There are systemic changes to the way people work, to where they work from and to when and where they commute, and all of those things are going to continue to create pressure on sectors that typically operate with highly variable income and pretty heavy fixed costs. The variability of that income is something of course that the government can do some things about, but the things that really ultimately risk crippling a business are those costs and in particular the fixed costs—and rent for most small businesses is first and foremost on that list. Whether you are in hospitality or the events sector, those rental fees are pretty chunky.

Now, in the events sector arguably a lot of the rent is a variable cost—you only pay the higher fees or whatever if you conduct the event. The same is not true for pubs, clubs, restaurants and the like, Acting Speaker Dimopoulos, and whilst it might be the case that, say, a particular menswear store could close and open down the street and retain all or most of their clientele, the same is categorically not the case for pubs. The identity, the business and the attachment people have to a pub is in very large part, at least at a conscious level, derived from the space it is in. You could not move the Imperial Hotel, across the road here, to another part of Melbourne and expect that the same users would simply go to it. In fact most of the Imperial’s—if you like, the old Imperial’s—clientele would not follow the pub, they would simply go to whichever hospitality business was operating in that building at that time. So there is a power imbalance that is a bit different in the hospitality space than is the case in other parts of the economy, because if I am a landlord and I am pressuring you, Steve Dimopoulos Menswear, to pay up or get out, then you might well find that you can find a shop six doors down or even three streets away, reopen your business and hang onto all of your clientele. That is absolutely not the case for, say, a Garden State Hotel. You cannot uplift a building like that, a premises like that, and simply move it anywhere else. The identity of the business is intrinsically linked to the building in which it is. So the power imbalance is acute.

And I know: I have had many stories relayed to me of lessees, tenant publicans who have a lease on a hotel—it might be quite a long-term lease; it might be 30 or 40 years—and have invested significant amounts of capital into the renovation of that hotel, and they find themselves in a position where they cannot meet the rent. And then you are in a position where there is a perverse incentive. There is a perverse incentive, because the goodwill of the business in effect is captured by that fit-out and by that building. So the landlord has an incentive to actually move the tenant on, because they get to keep the goodwill of the business for free, they get to keep the fit-out for free and they get to keep the customers for free. So particularly—and this is a circumstance replicated right across the city—in the case where landlords of pubs are in fact publicans themselves or former publicans, they potentially have the expertise and the ability to run these businesses. They have got a huge incentive to have tenants who might have just invested many millions of dollars in renovating a space—they have got a huge incentive in those tenants defaulting and being evicted, because they get to keep the totality of their business. This is a set of circumstances that I am very pleased the government addressed quite specifically in the first lockdown and continues to address through this very important commercial tenancy relief scheme and indeed through this bill.

One of the other issues of course that has sprung up in recent times is the many matters that were negotiated earlier in the pandemic that allowed, for example, for rent deferrals. Well, some of those rent deferral arrangements are falling due, and we are now finding tenants in a position where they owe arrears or that part of the arrears that was not waived. They owe that in addition to their current rent and then find themselves again in a position where their trading is being compromised. So they might owe rent at 1½ times the normal rate but still find themselves with income at 30 or 40 or 50 per cent or even nothing compared to their prepandemic levels of income. That is clearly not a position that is sustainable. Businesses that have made it this far have done very well to make it this far. They are not the sort of fly-by-night businesses that may tip over if their business is interrupted by a day or two days or a week. These are businesses that have encountered serious disruption and have managed to see it through, and they are exactly the sort of businesses we ought to be supporting.

And when I talk about power imbalance, that can actually run both ways of course. I have had people contact my office, landlords, who have said, ‘I’ve got a tenant who is just refusing to pay their rent. They don’t have a valid reason to do it; they are just refusing to pay their rent’. In those circumstances the job of government is first and foremost to get people to the table—to make sure that if there is a sensible discussion to be had about the commercial terms in the new world within which we live, that in fact that discussion happens. And whether you are a tenant or whether you are a landlord, I would say to you that doing nothing and saying nothing and paying nothing or offering nothing is not an acceptable way through this very difficult last phase of the pandemic. It is just not. You have to turn up, you have to engage with the mediation, you have to respond to the letters from the business commissioner, you have to respond to the requests from your tenant or your landlord to have a discussion about these things, because if you do not, you are ultimately going to find yourself on the wrong side of a decision that will obviously tend to mediate against you in circumstances where you have not engaged with the other party. It is more important than ever, as we at least now have something of an end in sight, that we facilitate the striking of commercially sensible arrangements between landlords and tenants right across the breadth of the economy. I am pleased that this bill facilitates that as well.

The Minister for Industry Support and Recovery in bringing this bill to the house noted the ongoing challenges to small business that we have had but also made note of the fact that there have been 19 000 net new small businesses created in the year to June 2020. So what we know is that once trading conditions improve we will see the growth in the sector, we will see the people return, we will see those businesses with highly variable revenue once again enjoying trading circumstances that they might have enjoyed prior to the pandemic. And all of that underpins the good sense in the government stepping in to assist both tenants and landlords of commercial tenancies to get through this last, acutely difficult bit.

None of us can have any confidence about what the next twist or turn will be in this extraordinary pandemic journey we have been on. None of us can have any confidence about that. What we do know though is that if you follow the science, if you respect the science, if you do the right thing by the health of the population, then the economy too will be protected. That has been the Australian experience throughout the course of this pandemic, and it has been the experience of most governments in Australia that if you do respect the science, ultimately the economy will look after itself in time. I commend the bill to the house.

Mr MAAS (Narre Warren South) (15:38): It too gives me great pleasure to rise to speak to the COVID-19 Commercial Tenancy Relief Scheme Bill 2021. It is always terrific as well to be following the member for Burwood, who had me—I must confess—reminiscing about my time as a one-time suburban lawyer, who used to have to negotiate many commercial leases, sometimes on behalf of the tenant and sometimes on behalf of the landlord, and some of those very difficult and tricky risk profiles that both of those parties have to carry.

As you, Acting Speaker Dimopoulos, noted before in your speech, small business is difficult, right? It is really hard, and with that you do carry risk. And if you are the government of the day, you have not just got to have a plan, you have actually got to have some fundamental philosophical underpinnings that go with the plan that you are trying to put out there. So the plan comes through good public policy; it is not just a one-off thing. This particular bill that we are pushing through of course is good for small business, but we have got to have a look at this as a part of a much broader Labor plan.

I am very proud to say as a member of this Labor government that it is something that has in fact been afoot since 2014. I was really confused by the contribution that the Leader of the Opposition made. I mean, it was somewhat muddled; it was a bit shaky. I was really at a loss as to how he was going to convince more than half of the electorate, let alone more than half of his own party. There were many things that he raised in terms of his support in speaking up, his party’s support for small business, which just did not ring true, like the example that he raised around Macca’s. The examples he gave are franchises that might pull in over a million bucks a week. It is just ridiculous to be thinking that. And then he went on to talk about maybe owning three or four McDonald’s franchises. These are not the sorts of people that this bill is looking to support. It is actually about your local cafe owner. It is about your local retail outlet. It might be the small drycleaner. These are the sorts of tenants that we are trying to support.

When I talk about a broader plan and I talk about broader good public policy I am talking about not only the sorts of things that all Victorians expect but of course the sorts of things that will help small business. As I referred to previously, when I was working as a small-firm suburban lawyer how great was it to have a local train station near you where your clients and in fact your customer base could come in and see you. I only wish that when I was doing that we had a level crossing removal program so that traffic could move around faster and my clients would actually rock up on time and I would not be late for my own appointments.

Let us talk about putting money into education as well, because we know that the better the quality of employees that come through your door, the better off your small business is going to be. We want to have good money going towards schools; of course we want to do that. Do not get me started on skills. You do not rip down TAFE.

Mr Brayne interjected.

Mr MAAS: No, you do not. You do not rip up TAFE. You put money in it because you want your workforce to be skilled, because with a good, skilled workforce your business is going to have great outcomes.

When it comes to hospitals, in a health pandemic is it a really good idea to rip down your infectious diseases hospital? It is not a good idea at all, is it? You have got to be putting money into health. So do not talk to us, do not lecture us and say to us, ‘There’s no plan’. In fact the plan is being enacted through a very comprehensive legislative program and, as I say, it is with great pride that we support the public policy initiative that this government is taking.

What also intrigues me about the opposition leader’s contribution and the few speakers that we had from the other side is that in fact they are not saying whether they support the bill or they do not support the bill. I would have thought that if you are the party for small business and you support small business you would actually come out and say that you support the bill. But from the three or four speakers that we have had we have had no-one saying that. So if you are the party for small business, please come out and say that you will emphatically support this bill, instead of just having these wish-washy, nuanced arguments around what the bill does not do or what you might want to do if in fact you had the privilege—the very great privilege—of being in government.

I might move on and talk to some specifics of the bill and indeed some of the concerns that landlords may well have. This is a reiteration of a previous act that has been in place, but I would like to commend the many landlords and tenants that have already participated in negotiations and have reached agreements to ensure that as many businesses as possible are able to survive the impact that COVID-19 has laid bare before us. In terms of those landlord concerns, this government has taken into account their feedback in the design of regulations to come to improve the actual, practical operation of the commercial tenancy relief scheme—for example, the timely responses between parties. It will be outlining behaviours that will be able to be taken into consideration by VCAT as evidence of good-faith negotiations by both tenants and landlords as well as providing additional resourcing and service delivery improvements to deliver timely mediation through the Victorian Small Business Commission. The Victorian government has also announced a $120 million support package for commercial landlords that do face hardship and are providing rent relief to tenants under the proposed commercial tenancy relief scheme.

Eligible businesses under this bill will be able to benefit from rent relief through this scheme, with tenants and landlords encouraged to enter negotiations again as soon as is practicable. The trigger is that rent relief for eligible tenants will be calculated by comparing their turnover for the final quarter of the 2020–21 financial year with their turnover from the final quarter of 2018–19. In terms of criteria, tenants will be eligible for the scheme if the drop in turnover is greater than 30 per cent. The percentage drop will also determine the amount of initial rent relief which will be available to the tenant.

There are some changes that that will be put in place that will make it different to the original scheme. As I have taken you through, these changes include the eligibility criteria given the absence of JobKeeper and also improvements in the practical operation of the scheme. The re-establishment of this relief scheme acknowledges that while we have made much progress, there will continue to be challenges for businesses in coming months. We must continue to carry on with this great work until the global pandemic crisis is behind us. It is there to ensure future growth and opportunities for businesses around Victoria. I commend this bill as a response to the pandemic, I commend it as good public policy and I of course commend it to the house.

Ms SULEYMAN (St Albans) (15:48): I too rise to make a contribution on the Commercial Tenancy Relief Scheme Bill 2021. It is an absolute pleasure to follow the contribution made by the member for Narre Warren South, and I echo the sentiments that he made in contributing on this bill. One word that comes to my mind when we talk about this particular bill is ‘relief’—relief for local small businesses that are run by mums and dads, in particular in my electorate of St Albans. There is no doubt that the global pandemic has had a profound impact on small businesses not only across Victoria but across the globe. St Albans has also had a really difficult and challenging period when it comes to small businesses. With the lockdowns, the restrictions and the impacts on normal trading and operation, there is no doubt that every business owner and every community member has really felt the side effects of the global pandemic. But it is important, and I do want to note, that the community of St Albans and small businesses and traders have really united during this very difficult time and supported one another. We have supported our local small businesses and made sure, where we can, to assist the mums and dads who do run these businesses and, more importantly, the casual staff who are local residents as well, keeping them afloat during this period.

This bill really does provide relief for small businesses and landlords. It assists them to get back on their feet. It provides rent relief for commercial tenants who have experienced, as previous speakers have said, a loss of turnover of over 30 per cent during the pandemic and encourages tenants and landlords to enter good faith negotiations as soon as possible, protecting their livelihoods but most importantly protecting families and the Victorian economy.

We know that the commercial tenancy relief scheme is absolutely integral. It has played a big role in helping small businesses, through our support packages, to survive, providing a strong framework for small businesses to be able to really stay on their feet and continue their business operations during this period. This scheme will run until 15 January next year. More importantly the bill will be retrospective from the date of announcement, which was 28 July 2021. As with the previous scheme, the 2021 commercial tenancy relief scheme will provide support for small businesses with a turnover under $50 million who have suffered a decline, as I said previously, of at least 30 per cent in turnover.

That really takes in a lot of my small businesses in St Albans, places like Hampshire Road in Sunshine, the shopping strip there, and of course the Alfrieda Street shopping precinct and the great eateries in Albion, on Perth Avenue. I really do want to take this opportunity, because recently St Albans was actually featured in a Postcodes episode—

A member interjected.

Ms SULEYMAN: Yes, absolutely. It was Channel 9’s Postcodes. None other than Shane Delia—and many of my constituents will be familiar with Shane—identified St Albans as a place of good food, good people and great experiences. That is what St Albans is really about—Pho Kim Long and restaurants like Phi Phi that really are family run, that provide great enjoyment but also great cuisine, that multiculturalism coming together, whether it is on Hampshire Road or Alfrieda Street.

I was talking to my traders last week in St Albans, and they said to me they have done it tough, absolutely, but their spirits were very high because they knew that they had a government that they could count on and they knew that there was support available so that they could recover during this period and more importantly be able to get that support when needed most—and this rent relief will do that. I do want to note that just this week in the local paper our local journo Tara Murray from the Brimbank Star Weekly quoted Sunshine Business Association’s Tracey Cammock. She said really clearly that this rent relief would be vital for small businesses and that:

Rental relief has been a big thing we’ve been talking about … Some Sunshine businesses have had some trouble paying the rent and the rental relief is welcome.

It’s the biggest help for local businesses. We just hope …

that this is passed on, as a lot of people have been missing out.

Those are the words from one of my local traders associations, the Sunshine Business Association. I want to shout out to our traders groups, which have been really assisting. Whether it is the St Albans Business Group Association or the Sunshine Business Association, they really have stepped in and gone beyond and become a real bridge when it really has mattered in providing information, support and at times just advice for these small businesses. Let me say the small businesses in my electorate are also, as I said, mums and dads, and their first language is not English. They require that extra support to make sure that government programs and support packages are actually able to be accessed by multicultural communities. I am extremely happy, in the circumstances, that we have been able to provide this support to small businesses and, importantly, landlords. When you say the word ‘landlords’, I know so many landlords who have worked very hard to be able to save up and invest, plenty who have come through from the factory floors, quite frankly. To do the right thing in this period of really, really difficult times, whether it is the small business sector, whether it is hospitality, whether it is our health and wellbeing—these are very tough times that require tough decisions. So it is absolutely welcome to see this bill, a bill that will provide some relief to our local traders. My business community have already made it very clear that this is something they have been talking about, something they have really, really wanted, and they have welcomed this business relief for the local community.

This is an important and valuable bill that will go a long way for all our local businesses. Again, I want to stress to my St Albans community that we continue where possible to support our local small businesses. Whether it is down at Big Sam supermarket, whether it is down at Alfrieda Street, Hampshire Road, Perth Avenue in Albion or many, many other businesses, we as locals should continue where possible to support our local businesses. They are the heart and soul of our community. They are our locals. Most of them are our neighbours. We continue in this very difficult time to be shoulder to shoulder with our small business community and, most importantly, with one another. As I keep saying, and we have heard it before, these are very difficult and very challenging circumstances, but the Victorian spirit, and in particular the western spirit, is one that unites and does the tough yards when required. We look after one another and support one another to get through, and the only way forward is, if you can—and my message is very clear—to get your jab. If you are eligible, make sure you get your jab. If you have symptoms, get tested and do the right thing. We have done it so far in St Albans, and I know we will continue to do it. We have got to make sure that we continue to support and secure the future growth of our local economy, making sure we secure the jobs. The local jobs are really reliant on our small businesses. I commend this bill to the house. Again, this is a bill that provides relief for all.

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.