Premier urged not to extend Commercial Code

Property Council WA Executive Director Sandra Brewer has asked Premier Mark McGowan not to extend an emergency code that compels landlords to provide millions of dollars in rent waivers to tenants.

Ms Brewer was speaking to the Premier at Property Council WA’s lunch-time event at Perth Convention and Exhibition Centre sponsored by AMP Capital and Stockland and attended by more than 400 people. Aside from key property and business leaders, attendees also included Planning Minister Rita Saffioti, Emergency Services Minister Fran Logan and Parliamentary Secretary to the Treasurer Reece Whitby, on Friday August 28.

Property Council WA President Scott Nugent, who introduced the Premier, also congratulated property industry attendees for their handling of the pandemic crisis, which has included waiving rent. 

“When the government sent out the call, this industry answered,” Mr Nugent said.

The commercial tenancies code, an emergency pandemic measure enacted by National Cabinet in March, was designed to share the losses borne by small business tenants forced to shut down because of COVID-19.

However, Property Council of Australia-commissioned research by Deloitte Access Economics estimates the Australian property sector has already paid out an estimated $4 billion to tenants under the Code. The figure rises to $6.8 billion when it takes into account rent assistance Australian landlords have given to tenants who did not fall under the Code. If the Codes in each State and Territory are extended to 11 months, the amount transferred from landlord to tenant under the Codes could rise to $8.8 billion.  

“Our WA members have given very substantial financial support to their tenants,” Ms Brewer said.

“We’re concerned that the financial costs of this pandemic do not fall on one part of the business community. If the code continues, it has the potential to threaten the viability of many small and mid-sized property businesses. It will also hurt the income of big property owners, resulting in reduced returns for every West Australian with superannuation and other managed trusts that invest in property. 

“The fact that WA is reopening for business and that there have been a relatively small number of landlord-tenant disputes indicates there is no need for the Code to continue beyond September 29.”

Property Council of Australia Chief Executive Ken Morrison last week warned that extending commercial leasing codes around the country adds billions of dollars of costs for property owners with potentially serious consequences for the economy and the financial system.

“In most jurisdictions the worst of the pandemic is clearly behind us and the economy is reopening,” Mr Morrison said.

Ms Brewer said extending the Commercial Tenancies Code in WA could undermine the capacity of the sector to contribute to the joint industry-government rebuilding effort, crucial to rebooting the WA economy, supporting projects and generating jobs.

The Premier also spoke about the changes forced by the pandemic, including measures such as fast-tracked planning reforms, the impact of the State Government’s Building Bonus package and the possibility of further changes to that policy.