Wednesday, 4 August 2021
Bills
Commercial Tenancy Relief Scheme Bill 2021
Bills
Commercial Tenancy Relief Scheme Bill 2021
Second reading
Debate resumed.
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, 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 has 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 prepandemic 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.
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 on 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.
Mr STAIKOS (Bentleigh) (18:10): It is a pleasure to rise this evening in the house to make a contribution on the Commercial Tenancy Relief Scheme Bill 2021. Like many members of this house, throughout this most significant public health crisis, this emergency, I have often—in fact every day—thought about those people who have been disproportionately impacted by the pandemic. We are all impacted in some way, but some more than others. There are people who have been fighting for their livelihoods, fighting to keep their heads above water, and they are of course casual workers, but they are also our small businesses. I would hazard a guess that every member of this place is engaged with the small businesses in their electorates, as am I, and they would have heard over the last 18 months some very distressing detail of the plights of people who are just trying to keep their businesses alive—trying to keep their livelihoods alive. They have had the support of this government and, to be fair—via JobKeeper, which we had up until March—of the federal government as well.
As the previous speaker pointed out, this government has provided more than $7 billion in relief by way of grants to businesses since the pandemic began, with the aim of supporting jobs—because at the end of the day, other than your health, what is more important than the ability to provide for yourself and your family? I know that many of our dedicated small business people have been doing it very tough, not just financially; their mental health has suffered as well. They have had the support of this government to survive through this pandemic.
On this particular scheme, I think it is timely that it is being brought back because I have had some feedback from small businesses in my electorate that the last couple of lockdowns have been particularly tough. The stop-start nature of the last couple of lockdowns has been particularly tough, and certainly with the absence of JobKeeper the pain has been compounded. This is a scheme that we are well aware of and very familiar with because it was around last year. It will benefit small businesses significantly by providing a framework for tenants and commercial landlords to come to agreements on rent relief. At the end of the day I think it is in the interests of landlords to make sure that their tenants remain viable during these challenging times. I do not know that there would be too many commercial landlords out there right now who would be very keen on having an empty shopfront during this very uncertain time. This is about landlords and tenants coming to agreements on rent relief. The scheme will run until 15 January 2022 and will be retrospective from the date of announcement, which was 28 July. Like the previous scheme, this will provide support to small businesses with a turnover of under $50 million that have suffered a decline of at least 30 per cent in their turnover.
In the spirit that I spoke of earlier, we expect that most commercial tenants and landlords will continue to work together to reach agreements that will best assist the ongoing survival of businesses, as I have seen throughout my electorate—tenants and landlords working together—and no doubt you have as well, Acting Speaker. But where the landlord and the tenant cannot reach agreement either party will be able to refer the matter for free mediation to the Victorian Small Business Commission, who will be resourced by this government to conduct that mediation and support tenants and landlords.
There will be changes to the eligibility criteria from last year given the absence of JobKeeper as a criterion and also improvements to the practical operation of this scheme. And in return for rent relief to tenants, landlords who experience hardship will be supported by a $120 million support package, which will include some land tax relief. This is an important scheme because it will assist our small businesses to get through that next challenging period, because the pandemic is far from over. It is far from over.
We have got to be maintaining the current relatively good environment we have in Victoria by being ever vigilant but also by making sure that we as a community are supporting our local small businesses. And that is certainly what people have been doing in my electorate. Even during lockdown people have been going out and buying an extra takeaway from the local cafe or doing a click and collect or an online order at a local retailer. It has really been very gratifying to see.
I particularly want to give a big shout-out to the Bentleigh Traders Association and indeed to all traders associations and local chambers of commerce across Victoria—I met with a number of them last year in my role as Parliamentary Secretary to the Treasurer—because the support that those traders associations have been providing has been invaluable. And I speak specifically of the Bentleigh Traders Association, who run a very, very big shopping strip. It is a huge shopping strip, Centre Road, Bentleigh. It is a busy shopping strip, and obviously local traders are very busy people, especially in times like this. What they have not had to worry about during the last 18 months is having to find out where to go and apply for grants or what the grants are, because as soon as the grants are announced the traders association sends links to the grant applications and various information to their inboxes. It is that sort of support that they get from the traders association, but also advocacy. My traders association is very good at advocating to local and state government on behalf of their members, and indeed Leonie Beckett from the Bentleigh Traders Association has my mobile phone number and does not hesitate to give me a call when she needs to talk to me on behalf of her members. Long may that continue.
There is a lot of positivity down in my electorate when it comes to small business. Centre Road, Bentleigh, has at least six or seven new businesses coming on board soon, businesses like Hunky Dory, Station Nutrition and The Pita Man. As I said, there is a lot of positivity, a lot of activity, down in Bentleigh with our small businesses. But obviously over the last 18 months, and recently in particular, I have spoken to many who are still struggling, even outside of lockdown. Many are small microbusinesses—those who are connected to the wedding industry, for instance, and a number of others—and there have been a number of support measures announced recently, including the other day when this commercial tenancy relief scheme was announced, to support those businesses, which I think is very, very important.
As I have said in this house on many occasions, if we want a strong economy, we do have to prioritise public health because we have seen many jurisdictions, including in Australia, where they have not prioritised public health and they have prioritised the economy. In the end they have achieved neither of those objectives, so it is important that we have a strong health focus in navigating our way through this pandemic while also supporting business and supporting jobs. I think when you consider that this state is predicted to have 6.5 per cent economic growth since September last year and we have created the better part of a quarter of a million new jobs, we have got the balance right, and we need to continue working to preserve public health and our economy.
Ms THEOPHANOUS (Northcote) (18:20): I am pleased to speak in support of the Commercial Tenancy Relief Scheme Bill 2021, which will deliver much-needed support across the state as well as to local businesses in the Northcote electorate. Over the past 18 months I have spoken with countless businesses in my community across Zoom meetings and round tables and phone calls and chats in the street. I have made it a priority to actively reach out and share information and advocate for our business owners, and I continue to be in awe of our local business community, who have not only shown immense resilience but have also continued to support their communities—our community—with immense compassion and care. We have seen businesses that are themselves struggling donate towards food relief programs and provide free meals to residents in need. We have seen creative industries and social enterprises—among some of the hardest hit during the pandemic—continue to care and provide for the health and wellbeing of the communities they serve.
We have always known that our small business community is essential to our economy. They create jobs, support families in the Northcote electorate and in particular they are the backbone of our thriving High Street, Station Street, Gilbert Road, Miller Street and all the other precincts across our suburbs. Over the past year and a half it has become even more clear that they are also a big part of what gives our suburbs strength and vibrancy and creates that sense of shared experience and identity that we are so proud of in Northcote. They have supported us and they have supported our community, and they deserve our support too. I have been really pleased to see so many of my local businesses accessing financial support through our numerous Victorian government programs. I know that for many it has made the difference between being able to keep the lights on and closing the doors for good.
For me it has also been important to hear from business owners about the key pressure points that they are facing. Every sector and every business is unique. From the many creative microbusinesses in Northcote to our vibrant hospitality and live music scene, our quirky retailers, our gyms, our breweries, travel agents, pet groomers and community support organisations, each has their own pressure points and challenges, and I have been working closely across sectors to communicate their needs, to clarify and expand the eligibility requirements in some cases and to look for creative solutions to the ongoing, complex challenges that we are all facing.
One of the key challenges raised with me regularly by businesses is the financial burden and stress of meeting commercial rental payments. From businesses with huge spaces, like the amazing Twisters Gymnastics or Moon Dog World, to those with small spaces and workshops, this has been a pressure point that is very real and a source of significant stress. The previous commercial tenancy relief scheme played a big role in helping many local Northcote electorate businesses survive to this point. It provided a strong framework for tenants and landlords to work together and reach fair outcomes, supporting jobs and allowing businesses and landlords to get through successive lockdowns. Fortunately we are now in a position to reduce restrictions, and businesses can start to reopen, but the impacts of the pandemic have been profound and they are ongoing, and we do not know what the future holds. Many businesses are still trying to recover and to balance tighter margins with looming deferred rent. Frankly it is stressful out there and it is volatile out there. Our small businesses deserve our protection, and that is exactly what we are delivering in this bill.
Fundamentally the bill enables us to reintroduce the scheme that made such a difference last year. It is intended to be as close as possible to the original scheme, with some necessary changes made now that the commonwealth government has ended JobKeeper. The scheme will run until 15 January 2022 and the act will cease on 30 April 2022, so it is giving ongoing certainty to our business community and landlords as we fight this wicked virus. Like last year, the 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. Over the past year we have seen many tenants and landlords work together proactively and with compassion to reach fair agreements around rents. The reintroduction of the scheme sends a strong message to both landlords and tenants to continue in that spirit, and we expect that many will continue to work directly with one another to achieve fair outcomes. Where difficulties do arise—and they do—and an agreement cannot be reached, this bill makes sure that supports are in place to help businesses negotiate a fair agreement. Either party will be able to refer the matter for free mediation by the Victorian Small Business Commission if they need to, and we are providing an additional $3 million in funding to the commission to make sure they have the resources they need to meet the extra demand.
As I mentioned, there will be some changes to the scheme to account for the premature end of JobKeeper and to strengthen its operation. A key change comes in regard to eligibility—unlike last year, JobKeeper is not a criterion for eligibility. Instead businesses will need to show evidence that they have experienced the required drop in turnover. This will generally be acquitted just through a standard letter from a practising accountant. Importantly, 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, and rent increases will also remain suspended during the extension.
We are building on the learnings from last year to help ensure this is as simple a process as possible for our small business community, who we know are already under the pump, so we are working to reduce the administrative burden and provide clarity on the process for both tenants and landlords. Rent relief will be calculated by comparing the turnover for the final financial quarter in 2020–21 with turnover from the final quarter of 2018–19. This will also be used to calculate the amount of rent relief available to the tenant. Special arrangements will also be in place for businesses that were not operating then. Incredibly, in the Northcote electorate we have seen a number of amazing businesses open over the past year, like the wonderful PavQueen down in Alphington or Zsa’s bistro in Northcote. They have opened up during the midst of a pandemic, which is quite remarkable. Some have pivoted their businesses in response to the pandemic and others have steamed ahead to create new local enterprises we are already coming to know and love, and they are creating new local jobs in the process. It is critical that these businesses do not miss out, so I am immensely pleased to see that they will be provided for under this scheme.
We know that many tenants accrued significant deferred rent last year. The new regulations will include an ability for a tenant to pause their payments on previously deferred rent until 15 January 2022 if they require further rent relief to enable their business to survive through this very difficult period. This will also help ensure our businesses can survive and grow and support local employment in the process. Just a note on our local landlords—I also just want to say thank you. I know many of you have been doing the right thing, working closely with your tenants to support fair outcomes, and I know that in doing so you are making your own sacrifices. You too are taking on the burden of keeping us all safe. Recognising this, we are working to ensure your feedback is addressed in the reintroduced scheme, and we are delivering an $80 million hardship fund for commercial landlords that face hardship from providing that rent relief to tenants that they so desperately need. We are also providing land tax relief of up to 25 per cent to help ease the cost burden for those doing the right thing.
Of course the support delivered through this bill is not a standalone measure. It builds on the unprecedented support provided by the Victorian government to businesses across the state over the course of this pandemic. From day one we have been committed to supporting our small business community. More than $7 billion in financial support has gone out to businesses, with $940 million delivered over the May–June lockdown alone. This is not to mention the recently announced $400 million jointly with the commonwealth. Specific supports have assisted our creative, licensed hospitality, live music and other industries facing unique challenges, and we have a lot of those within the Northcote electorate, so for that I am very grateful. We know that no amount of support can take the place of being fully open for business, no amount of support can change the fact that we have been living through a pandemic and no amount of support can wholly make up for the inherent challenges and risks and ups and downs of running a small business, but our small business community have done a remarkable job so far, and as a government we must continue to put in place the parameters that allow them to set up arrangements that are fair and will get them to the other side of this. I will keep working closely with our small and micro businesses as well as our local creatives and other businesses to make sure their needs are understood and that they are getting the support they need. In closing, I just want to thank every local supporting our small business community as well.
Ms KILKENNY (Carrum) (18:30): Thanks for the opportunity to contribute to the debate on the Commercial Tenancy Relief Scheme Bill 2021. This bill is but another in our government’s continuing response to the COVID pandemic. It is focused on supporting small business and obviously their workers that have been significantly impacted by COVID-19 over these past 15 months, and that is this government’s focus. That is this government’s commitment.
We have heard that this bill will enable regulations to be brought in to reintroduce the tenancy relief scheme, and I want to acknowledge the good work of the Minister for Small Business, the Honourable Jaala Pulford in the other place, for working so hard to be able to bring this bill before us this week.
We know how incredibly tough the pandemic has been on small business owners. They have been under significant economic stress and financial distress. Lockdowns and restrictions are hard on everyone, but I think for small business in particular lockdowns and restrictions can be especially difficult. They impact such immediate things, like cash flow, certainty and business confidence, and yet, as we have heard today in a number of the contributions made here, despite these overwhelming challenges we have also seen small businesses show such resilience and such compassion. Indeed many of the small businesses in my electorate who I have spoken to during the pandemic have indicated that whilst obviously they do not like restrictions and they are not happy with the lockdowns, they have committed to them and they have done the right thing and they have followed the rules. And we know they are hurting, which makes their compassion, their resilience and their concern for fellow Victorians and for the public health of Victoria even more compelling and inspiring. And I do really want to commend their work and their commitment to public health here.
I want to acknowledge also their understanding that the lockdowns, while incredibly difficult, are nevertheless necessary. We know this is fact. We have seen now public modelling that goes to show this. In fact our own Prime Minister has acknowledged that our lockdowns are necessary. And we know that it is our lockdowns that have kept Victoria safe. It is our lockdowns that have kept Australia safe. And to their credit Victorian small businesses have played such an incredible and such a vital role in all of this. Ultimately, we know that the only way our economy and our small businesses in particular are going to recover and rebuild and return to growth is with the suppression of the virus in our community. It is with getting our vaccination rates way up and by collectively, all of us, agreeing to do the right thing and complying with restrictions and with lockdowns when they are imposed from time to time.
We have heard the Leader of the Opposition and other opposition speakers today speak about the need for a plan, and I must say I find this quite extraordinary in the current context, where we have a Prime Minister in Scott Morrison who has shown such a lack of planning and such disregard for a national approach to ending the coronavirus. It has really been a case study in what not to do in handling a pandemic of this nature. Indeed I think we have been really lucky with the states and territories and with Victoria leading, I must say, in developing what is now looking to be like a national plan—a plan that everyone recognises will for the time being include short, sharp lockdowns as probably the most fiscally responsible, indeed the cheapest, way to deal with outbreaks until our national vaccination coverage is much, much higher.
We know that whatever we do here in Victoria there will still be an enormous amount of people across the world, not to mention across this country, who have been neither infected nor vaccinated, and the virus is going to keep ticking away. There are going to be variants to the virus. There will be different strains to this virus, and that is why I think something we really do need to showcase as well is the Andrews Labor government pledge of $50 million to develop an mRNA vaccine industry, as well as hundreds of millions of dollars to set up the Australian Institute of Infectious Disease next to the Doherty Institute, Melbourne University and the Royal Melbourne Hospital. So when we are talking about a plan, that is a pretty good plan—developing an mRNA vaccine industry to develop COVID-19 vaccines and boosters, doing it right here in Victoria. It is a game changer. Not only will we be protecting our community, protecting our economy and protecting the viability of our small business but we will be supporting an industry and also generating an export capacity in vaccines the likes of which we have never seen before.
As for a plan, it was this government, the Andrews Labor government, that put forward the plan for a dedicated quarantine facility. That did not come from the commonwealth. That was initiated here in Victoria, and that is because we know that our hotels were never built to contain a virus as infectious as the coronavirus. And this government will not divide our communities. We are not going to pit people against each other. We are not going to pit small business owners against each other. We will not pit commercial tenants against landlords. This government is about backing our small businesses, because we know that no-one wins if we do not beat this virus. The public health has to underlie our entire response to our economy recovering and to the rebound and growth in our small business. Indeed we know that our small businesses need to survive this pandemic. They need to come out the other side.
So if you ask about a plan, it is ensuring that we run to ground, as quickly as possible, coronavirus outbreaks in Victoria, because we know how much damage a protracted outbreak can do to small business. It is something that we are seeing in New South Wales right now. It is something that New South Wales needs to acknowledge. Our plan is about ensuring that our border communities are protected from the imminent threat that is posed by the continuing and, so far, unrestrained outbreak in New South Wales. And we heard today, tragically, of a man just in his 20s with no underlying health conditions who has died in New South Wales.
Our plan is about providing support of more than $7 billion in funding for Victorian small businesses. This is unprecedented support. It includes a new Victorian business support package, delivering an additional $400 million in support to thousands of businesses across Victoria—$85 million of this will deliver the Small Business COVID Hardship Fund, $156 million will deliver the Business Continuity Fund and $70 million will deliver more support as part of the Licensed Hospitality Venue Fund. And of course it will also include support for commercial tenants and landlords—the subject of this bill.
So this bill is about listening to our small businesses. It is about continuing to do what is necessary to support small business here in Victoria. It also recognises that this is an evolving situation. The pandemic is evolving; it is continuing to evolve. And that is why it is important to respond to that evolution of the virus, which is why, as part of the package that we are providing to small business, we are now introducing this tenancy relief scheme. It will apply retrospectively from the date it was announced, which was on 28 July. But this is important in the scheme of our economic recovery. It recognises that our public health is critical and crucial to the economic recovery of this state. It also recognises that we are never alone here, that we are part of a nation and that if we are to rebound and to grow our economy, it must be done with a national plan in place. I commend the bill to the house.
Mr McGHIE (Melton) (18:40): I rise today to contribute to the COVID-19 Commercial Tenancy Relief Scheme Bill 2021. It comes as no surprise to anyone that these last 16 to 18 months have seen struggles for Victorian businesses unprecedented in our state’s modern history. The resilience of all of our community and our small businesses in facing and responding to this pandemic is truly remarkable. We have seen many businesses show extraordinary resilience and adapt and in some cases even create new business opportunities.
The tenacity of Victorians is profound, but of course the necessary lockdowns to keep Victorians safe have obviously had an impact on Victoria’s small business community. The impact on businesses and the health of Victorians of our not locking down in a health crisis would have created a far greater economic pain—we are seeing this in other states currently and overseas. The economic impacts of the COVID-19 pandemic will be felt for much longer as the environment that many businesses operated in has changed. In particular, the way many Victorians live and work has been inextricably altered. Many Victorians are still working from home. COVID has accelerated that experience. We have seen many families and individuals move to regional areas of Victoria. The demographics of our communities have changed as international visitor, student and immigrant numbers have declined. Previous business conditions will not automatically return because of COVID vaccination efforts being successful. Even with a worldwide decline in COVID infections, many overseas communities have had their own economies changed, and this economic situation will potentially impact Victoria’s economy as well. Hesitancy for families to be separated from each other will be a consideration for many international students, businesspeople, migrants and of course our visitors.
As we emerge from the pandemic we will see a very different economic reality. We have seen demographic changes where families have moved away from close to central business areas to regional areas and further out. Some families have looked to have larger spaces closer to more recreational facilities, parks and nature. This means that as they move, the businesses that they used to frequent see a reduction in patronage and ultimately new businesses in their area have new customers. Some of these people create businesses themselves or relocate to operate their business differently. The resilience of the small business community in Victoria has been absolutely amazing, and many of these businesses may need to adapt to this new change, not just because of lockdowns but because of the change in our economy.
Now more than ever Victorian small businesses need our support. Many of the business operators I have spoken to used to be able to rely on the support from the federal government, but now in the absence of JobKeeper many of these businesses are still facing uncertain economic conditions. During the pandemic my office made a conscious effort to further support the Melton electorate small business community. We advertised in the local Moorabool News, who continue to publish continually and support the Moorabool community. In our adverts we often encouraged readers to buy local and support local, especially when cafes and restaurants were restricted to takeaway only. Our adverts encouraged locals to support these businesses.
Recently my electorate office was being renovated, and during those many months of being away from that office we made sure to use the many wonderful local cafes for meeting constituents and for staff meetings when we were able to do so. I would like to shout out to the following cafes and restaurants: Lola’s Cafe in Bacchus Marsh, Baby Black Espresso Bar, Little Lucky Cafe, Matilda Bakery Cafe and the Jolly Miller cafes in both Melton and Bacchus Marsh. All these local businesses have amazing staff, fantastic food and of course fabulous coffee. Thank you for opening up your businesses to my office during my office renovations. I encourage everyone to still get out and enjoy the hospitality of these and the many other local businesses in the Melton electorate. Advance Stationers in Melton have also supplied my electorate office over many years, but I was delighted to restock my office once we moved in with supplies from this fantastic local business—and I encourage others to look in their own backyard. You can be surprised at what you find. Often the prices are far better or still competitive, and I can almost guarantee the service from your local business will be miles ahead of many big retailers. Many businesses have adapted and sought new models to trade. One such business is Interior Motive in Bacchus Marsh, which during the lockdown moved to online auctions and contactless delivery to the doors of their customers, and it has been a very successful move by that business operator. This resilience and creativity has been seen right across many small businesses in the Melton electorate and right across Victoria.
I would also like to commend the BP service station and their staff in Maddingley in Bacchus Marsh. They provide a valued service for the community, including small groceries and takeaway food, not just fuel. They have done brilliantly in the wake of the delta variant outbreak at the local grammar school. They sought assistance from our office and I know from the office of the member for Buninyong, who is currently in the chair, to assist them in returning to operations as soon as they possibly could. They wanted to continue to serve their customers and also provide continuing employment for their staff.
Previously the commercial tenancy relief scheme played a very important role in helping many of these small businesses to survive and importantly provided a strong framework for small commercial tenants to negotiate for rent relief. It is important that this government acts decisively once again to back our small businesses and to reintroduce a commercial tenancy relief scheme. The Commercial Tenancy Relief Scheme Bill 2021 will enable the regulations to be reintroduced. It will ensure that the scheme will be as consistent as possible with the original scheme. This is even more important now that the JobKeeper program is so notably absent. The scheme will run until 15 January 2022, and the act will cease on 30 April 2022.
This bill, like 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. It is expected that most commercial tenants and landlords will continue to work together to reach agreements that will best assist the ongoing survival of businesses. Where the landlord or tenant cannot reach agreement, either party may refer the matter for free mediation by the Victorian Small Business Commission. The VSBC will receive an additional $3 million in funding to meet the increased mediation costs from introducing this commercial tenancy relief scheme. I commend the many landlords and tenants that have already participated in negotiations in good faith and have reached agreements to ensure that as many businesses as possible survive the impact of COVID-19.
I also understand that many landlords will be unhappy with the decision to reintroduce the commercial tenancy relief scheme. We are seeking to address some of their concerns, including through taking into account their feedback on the design of regulations to improve the practical operation of the commercial tenancy relief scheme—for example, timely responses between parties, outlining behaviours that will be able to be taken into consideration by the Victorian Civil and Administrative Tribunal as evidence of good-faith negotiations by both tenants and landlords and of course additional resourcing and service delivery improvements to deliver timely mediation through the VSBC. The Victorian government has also announced a $120 million support package for commercial landlords that face hardship from providing rent relief to tenants under the proposed scheme.
This government has taken decisive approaches to protect the health of Victorians during this pandemic. It is now clear that prioritising health is the clear pathway to economic recovery. Today we saw a zero-case doughnut day in Victoria as the dangerous delta variant spreads throughout other parts of the Australian commonwealth. I would like to congratulate Victorians and Victorian business operators. No-one enjoys lockdowns, but businesses in Victoria are operating, albeit in difficult circumstances, when businesses in other jurisdictions remain closed. Providing a health response in a pandemic is a clear path to economic recovery. Businesses, and in particular small businesses, have assisted with the health response by complying with the health orders, and I thank them for their efforts in helping to drive this virus to the ground. Supporting small businesses to recover and thrive is essential as we look to rebuild from the challenges of the last 18 months.
I congratulate the ministers responsible for their hard work on this scheme and the Treasurer and the Premier for their great leadership to ensure that Victorians are safe and we can rebuild the economy in this challenging time. I commend this bill to the house.
Mr CHEESEMAN (South Barwon) (18:50): It is with some pleasure that I rise this afternoon to speak on the Commercial Tenancy Relief Scheme Bill 2021. I must say in reflecting on this bill and indeed reflecting on the nature of my electorate, I think it is worth just really understanding that in terms of Geelong we are very, very dependent in so many ways on so many Victorians, so many Australians and so many international people making their way to our region to enjoy the fantastic tourism offerings that are the Great Ocean Road, the Surf Coast and the broader Geelong and Bellarine communities. And of course what very much underpins that fantastic tourist offering that comes from our region is not just the very, very beautiful landscapes that we do indeed have but those very, very important small businesses that operate the length and breadth of the Great Ocean Road, right throughout the Surf Coast, around the Bellarine Peninsula and throughout Geelong, offering a fantastic service to those that make their way to our community. And those small businesses make a meaningful and significant contribution to not only those families that run those businesses but also the many, many thousands of Geelong people and people from my broader community who take up the opportunity of employment within those small businesses. I know that many of my colleagues throughout the Parliament have taken every opportunity, as I have, where they can over the last 12 or 18 months to highlight those fantastic offerings that we have had within our own community. As the member for South Barwon I have had some great pleasure in visiting my small businesses and highlighting their offering to our region and indeed to all Victorians and to those from further afield.
But also when I reflect on my community and Geelong, of course Geelong is a community that is moving. We see many, many thousands of people that are taking up the opportunity of building their first home in areas like Armstrong Creek. And again, that is not only providing a fantastic place for people to live but also providing many, many, many jobs. And indeed we do know that over the last 12 or 18 months many small businesses not just in my region but throughout the whole of the state, the nation and the global community have done it particularly difficult because of the global pandemic, the COVID-19 pandemic that we have collectively, as a society, gone through.
I think it is very, very important to reflect on our journey here in Victoria, to reflect on the nation’s journey and to remember those very, very salient lessons from 100 years ago from the Spanish flu. And what we know—what our experts very much inform us and have been continuously informing us through these troubling times—is the importance of the lessons learned from back then. Back then the best way for those communities, globally, to deal with the Spanish flu was the social-distancing measures that those communities put in place. And those communities globally that refused to accept the advice of medicos back then paid a much, much higher price than other societies who were more enlightened and listened to the experts that were providing those very clear medical directions about what people and communities ought to do to keep themselves safe.
Very unfortunately, as a government we have had to make those very, very tough decisions to curtail our movements, making it harder for us to go about our livelihoods and earn a living. We have always said that our response as a government to this pandemic would be in the first instance responding to this challenge as a health challenge and that once we had responded in that way, then we would put in place the appropriate economic settings to help support the recovery of our economy. Of course we have been, I think, very deliberate in the decisions that we have made to help make those investments in our economy, to keep jobs going and, importantly, to help support small business.
I know when I look at the various ABS statistics how important small business is to my economy and to my community. I know how important it is throughout Victoria and indeed throughout the nation. That is why we thought it was absolutely appropriate on a number of occasions throughout the last 18 months or so to put in place those mechanisms to ensure that we can keep our small businesses vital and get them through the other side of this pandemic, because we know if we do that, they have every opportunity to spring back and create economic prosperity for those families directly involved in those small businesses and also of course the many tens of thousands of workers throughout the Victorian economy whose employment is underpinned by the viability and the success of those small businesses.
I must say, in listening to the course of this debate I have heard some fantastic contributions by members of the Andrews Labor government in recognising the important contribution that small business makes. I must say, I have been very proud to be a member of the Andrews Labor government and our team as we have gone about putting in place these mechanisms and these arrangements to help underpin the viability of small business. It is in no-one’s interest to see a viable and functioning small business which had done well for the owners and for those that they employ go under as a consequence of a pandemic. It is in no-one’s interest, let alone the landlord’s, for that small business to go under. That is why we have sought to intervene in the way that we have and help support those small businesses, to make sure that as a government we can broker arrangements, where appropriate, between landlords and tenants. Hopefully they can reach those conclusions themselves so that we get our small businesses through the next 12 or 18 months as we get through the global pandemic and as we help support our economy going forward.
Now, as I said, I am very proud to represent a very strong tourism sector. I am very proud to say that the Great Ocean Road and the Surf Coast and the Geelong hinterland are in my electorate and within my community. I am very proud to say that the tourism sector employs many tens of thousands of South Barwon constituents, and of course many, many thousands in my community own small businesses that are important to my region. As an Andrews Labor government, we will take every step we can wherever possible to help support small business. These particular arrangements I think are critical for getting our small businesses through the next 12 or 18 months, getting them through the pandemic so that they can grow, so that they can prosper and so that they can again be the engine room of our economy.
Following speeches incorporated in accordance with resolution of house of 3 August:
I am pleased to contribute to the COVID-19 Commercial Tenancy Relief Bill 2021.
I begin by thanking and acknowledging the great work of the Minister for Small Business and her team. It is important that we listen to the feedback from small business representatives to ensure we put support where it is needed.
I know very well small businesses are one of the biggest employers in the Geelong region and contribute significantly to our local economy. I want to acknowledge the work of the Geelong Chamber of Commerce who have continued to support small businesses and have kept me abreast of the challenges and supports across Greater Geelong.
The past year has presented ongoing challenges to Victoria’s small businesses due to COVID-19.
Despite the impact of the pandemic, we have the seen great resilience and strength of Victorian small business operators, many of whom have managed to create and grow new business opportunities during this time.
Despite this resilience, Victoria’s small businesses continue to grapple with the profound effect of successive lockdowns.
Victoria’s small businesses deserve our support.
The previous commercial tenancy relief scheme played a significant role in helping many small businesses survive to this point, providing a strong framework for small commercial tenants to negotiate rent relief.
In my electorate of Geelong the feedback showed strong support for the scheme previously and of course now for the announced $80 million in funding to support commercial landlords who provide rent relief to eligible commercial tenants.
It is critical that the Victorian government acts decisively again to back our small businesses as they emerge from lockdown by reintroducing the commercial tenancy relief scheme.
The Commercial Tenancy Relief Bill 2021 will enable regulations to reintroduce the scheme, intended to be as consistent as possible with the original scheme, with some necessary changes particularly in the absence of JobKeeper.
The scheme will run until 15 January 2022 and the act will cease on 30 April 2022.
The scheme will apply retrospectively from the date of announcement, which was 28 July 2021.
Like 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.
This is not an opportunity for the big end of town to improve their bottom line. Nor is it a scheme that allows tenants to walk away from their contractual obligations. This initiative is about helping businesses survive through a process of compromise and burden-sharing. It’s about protecting livelihoods and the Victorian economy including the regional economy such as Geelong.
In that spirit, it is expected that most commercial tenants and landlords will continue to work together to reach agreements that will best assist the ongoing survival of businesses.
Where the landlord or tenant cannot reach agreement, either party may refer the matter for free mediation to the Victorian Small Business Commission (VSBC).
The VSBC will receive an additional $3 million in funding to meet increased mediation costs from reintroducing the commercial tenancy relief scheme.
While it is intended that the 2021 commercial tenancy relief scheme be as consistent as possible with the original scheme, some changes are required.
These changes include the eligibility criteria, given the absence of JobKeeper as a criterion, and also improvements to the practical operation of the scheme.
Key eligibility criteria include small commercial tenants with a turnover under $50 million, evidence that a business has suffered a decline in turnover of at least 30 per cent compared to a relevant period as prescribed in the regulations, and special arrangements would be in place to enable eligibility for newly created businesses.
Evidence would generally be provided through a standard letter from a practising accountant.
I commend the many landlords and tenants that have already participated in negotiations in good faith and have reached agreements to ensure that as many businesses as possible survive the impact of COVID-19.
I also understand that many landlords will be unhappy with the decision to reintroduce the commercial tenancy relief scheme.
We are seeking to address some of their concerns, including through taking into account their feedback in the design of regulations to improve the practical operation of the commercial tenancy relief scheme, for example, timely responses between parties, outlining behaviours that will be able to be taken into consideration by the Victorian Civil and Administrative Tribunal as evidence of good faith negotiations by both tenants and landlords, and additional resourcing and service delivery improvements to deliver timely mediation through the VSBC.
The Victorian government has also announced a $120 million support package for commercial landlords that face hardship from providing rent relief to tenants under the proposed commercial tenancy relief scheme.
The re-establishment of the commercial tenancy 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 vital work until the COVID-19 crisis is behind us to ensure future growth and opportunities for businesses around Victoria.
I commend the bill to the house.
I rise to make a contribution in relation to the Commercial Tenancy Relief Bill 2021.
These changes will temporarily empower the making of regulations by the Governor in Council to modify the application of the law of Victoria in relation to certain commercial leases and licences for the purpose of responding to the COVID-19 pandemic, as well as making of provision for transitional matters.
We all know that the past year has presented ongoing challenges to Victoria’s small businesses due to COVID-19.
These challenges are something most of us have never encountered before in our lives.
And as the child of a small business owner myself, I understand the impacts this has had, particularly on our small business owners.
Despite this, there has been an amazing resilience and strength of Victorian small business operators.
We have seen many small businesses who have managed to create and grow new business opportunities during this time.
We have also seen remarkable support by our local communities to rally behind their local small businesses and support them in a tremendous way.
Despite this support and resilience, Victoria’s small businesses continue to struggle with the strain that lockdowns have caused.
I am proud to be a member of a government who understand this and who really appreciate that Victoria’s small businesses deserve our support.
I am also proud to be a member of a government who instigated such targeted assistance as the previous commercial tenancy relief scheme.
We recognise the significant role this scheme had in assisting many small businesses to survive to this point.
It provided a strong framework for small commercial tenants to negotiate rent relief.
And it is critical that we as a government act decisively again to back our small businesses as they emerge from lockdown by reintroducing the commercial tenancy relief scheme.
The Commercial Tenancy Relief Bill 2021 will enable regulations to reintroduce the scheme, intended to be as consistent as possible with the original scheme, with some necessary changes particularly in the absence of JobKeeper.
The scheme will run until 15 January 2022, and the act will cease on 30 April 2022.
It is also important to note that the scheme will apply retrospectively from 28 July 2021, which was the date it was announced.
Similar to the previous scheme, this 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.
It is not an opportunity for large, high-earning businesses to improve their bottom line.
Nor will it allow tenants to walk away from their contractual obligations.
It is purely an opportunity to help small businesses survive through a process of compromise and burden sharing.
It’s about protecting livelihoods and the Victorian economy.
In that spirit, it is expected that most commercial tenants and landlords will continue to work together to reach agreements that will best assist the ongoing survival of businesses.
Where the landlord or tenant cannot reach agreement, either party may refer the matter for free mediation by the Victorian Small Business Commission (VSBC).
The VSBC will receive an additional $3 million in funding to meet increased mediation costs from reintroducing the commercial tenancy relief scheme.
As I mentioned previously, there will be some changes to the scheme.
These are required due to the absence of JobKeeper.
They will also allow for some improvements to the practical operation of the scheme.
But as a whole it is as consistent as possible with the original scheme.
Key eligibility criteria include:
small commercial tenants with a turnover under $50 million
- evidence that a business has suffered a decline in turnover of at least 30 per cent compared to a relevant period as prescribed in the regulations
- special arrangements would be in place to enable eligibility for newly created businesses.
Evidence would generally be provided through a standard letter from a practising accountant.
I commend the many landlords and tenants that have already participated in negotiations in good faith and have reached agreements to ensure that as many businesses as possible survive the impact of COVID-19.
Understandably, there may be some landlords unhappy with the decision to reintroduce the commercial tenancy relief scheme.
As a government, we are trying to address some of their concerns.
Feedback has been taken into account in the design of regulations to improve the practical operation of the commercial tenancy relief scheme—for example, timely responses between parties.
We have also outlined behaviours that will be able to be taken into consideration by the Victorian Civil and Administrative Tribunal as evidence of good-faith negotiations by both tenants and landlords.
We have provided additional resourcing and service delivery improvements to deliver timely mediation through the VSBC.
In addition to these, we have also announced a $120 million support package for commercial landlords that face hardship from providing rent relief to tenants under the proposed commercial tenancy relief scheme.
In an ideal world, a scheme such as this would not be needed.
But in the face of a worldwide pandemic, it is what is needed.
The re-establishment of the commercial tenancy 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 vital work until the COVID-19 crisis is behind us to ensure future growth and opportunities for businesses around Victoria.
This bill is an important piece of legislation to deliver assistance for our small businesses and, as such, I support this bill.
I commend this bill to the house, and I wish it a speedy passage.
The DEPUTY SPEAKER: Order! The time set down for consideration of an item on the government business program has arrived, and I am required to interrupt business.
Motion agreed to.
Read second time.
Third reading
Motion agreed to.
Read third time.
The DEPUTY SPEAKER: The bill will now be sent to the Legislative Council and their agreement requested.
Business interrupted under sessional orders.