The National Cabinet’s decision on a code of conduct for commercial tenancy this week comes as governments, business and the community are still coming to terms with the far-reaching economic and social impacts of the coronavirus pandemic.
One of these big shifts is the extent to which governments, through the National Cabinet, are intervening in the economy including areas where they have previously had little or no direct role.
The decision to impose a mandatory code of conduct to be legislated by state and territory governments is a striking example of this.
The Property Council’s board, our members and advocacy teams around the country have been intensively engaging with governments around the country at the most senior levels on a daily, and indeed almost-hourly basis, on the issues covered by the code.
Some aspects of the government code are an improvement on the earlier leasing principles endorsed by National Cabinet, especially that which would have allowed tenants to terminate leases at will and would have had catastrophic consequences for the commercial property sector, our financial system and the economy more broadly.
However, there remain areas where we believe commercial property owners are being asked to shoulder too much of the risk or burden of rent relief and not enough safeguards for small landlords and prior agreed arrangements. These will be the subject of intense negotiation with state and territory governments as they look at giving practical effect to the code in their jurisdictions.
We also need to see stronger commitments from state and territory governments on relief from land tax and other charges for commercial property owners. There should be more news in this space soon. Banks and lenders also need to lock in behind their commercial property customers who are being directed to provide help for tenants.
You can read more about the detail of the code and the unfinished business which will be driving our advocacy in coming days in this issue of Property Australia.
In the meantime, please enjoy a happy and healthy Easter holiday period – at home.