Commercial owners yet again foot the bill of government restrictions
The Property Council of Australia is disappointed the NSW Government has yet again extended the Commercial Code of Conduct mandating that private businesses forgo rent agreed to under agreed leases.
NSW Executive Director Luke Achterstraat said it was extraordinary to see further government intervention into commercial contracts with vaccination rates now at 95 per cent and lockdowns behind us.
He said the extension of a highly interventionist policy was not fit-for-purpose as we learn to live with the virus and deal with the Omicron transition.
“It is remarkable that NSW is now seemingly the only jurisdiction in the country continuing this practice of intervening into private contracts – particularly given the Government’s strong commitment to live with the virus and promote the state as a place to invest.
“This decision should be seen for what it is: government intervention into legal contracts and a compulsory transfer of income from one business to another. Such radical measures are not what ‘living with COVID’ is supposed to be about.
“The extension of the one-size-fits-all code creates more administrative burden for tenants, government and owners. Further regulation simply brings red-tape through higher compliance costs when many negotiations are already underway, and many deferred rent amounts are still outstanding.”
Mr Achterstraat said the property industry had already provided $15b support to tenants in 2020, and in 2021 demonstrated support above and beyond the requirements of the code.
“Our members recognise the importance of supporting their tenants and have done so over the last two years on a tailored case-by-case basis,” Mr Achterstraat said.
But he noted the code needed to be called out for what it is as we move into 2022 and learn to live with the virus.
“To be clear, this measure is not government support but government intervention into commercial contracts. It is the legislated transfer of income between private entities.
“Property is the only private industry being legislated to support other private industry, with scant regard to the challenges faced by commercial property owners themselves.”
Mr Achterstraat said challenges facing SME businesses broached issues such as labour shortages, supply chain reliability and reduced foot traffic, none of which is the fault of the landlord.
“Going forward, governments must wean themselves off intervening into contracts as the panacea for problems caused by government-imposed lockdowns and restrictions.”
Mr Achterstraat said that commercial contracts need to be honoured for New South Wales to remain an attractive investment destination.
“With international capital more mobile than ever, NSW needs to present a credible environment for business, and government intervention into commercial contracts only undermines that investment proposition.”
Media contact: Luke Achterstraat | 0417 194 935 | [email protected]