With over a hundred days of state and territory lockdowns imposed this year, and no end in sight, businesses are bearing the brunt of more pandemic pain than ever.
The economic cost of the Delta outbreaks is in the tens of billions of dollars, and at the heart of this crisis are small businesses – the lifeblood of our communities.
Many retailers are struggling to hang on. Some have already gone – among them are our favourite cafes and corner stores, along with our local hairdressers and beauty salons.
Most of these businesses have taken years to build to success and are simply the innocent victims of the pandemic.
We need to do all we can to ensure the survival of those that are still hanging on.
To keep these businesses alive, we must reintroduce rental relief in every state and territory via the Commercial Leasing Code of Conduct.
The biggest pain point for retailers right now is rents. With little or no money coming through the door for businesses that have been deemed ‘‘non-essential’’, small businesses in particular are scrambling to pay their bills, which continue despite lockdowns.
Without a proper framework in place, rents are causing friction between landlords and tenants and unnecessary stress and anxiety at the worst possible time. The federally instigated Leasing Code of Conduct in 2020 was one of the successful measures that supported businesses through the first wave of the pandemic.
It provided a proper framework for negotiations between landlords and tenants while mandating rent relief in proportion to a business’s decline in turnover.
As a result of the ARA’s advocacy, we’ve seen this valuable measure return in NSW, but as yet businesses in other states are not being afforded the same protections.
While the Leasing Code that’s been returned in NSW is capped for businesses with a turnover of $50m, it also serves as a valuable guide for negotiations in larger tenancies.
The Victorian government has also introduced a Commercial Tenancy Relief Scheme, and while this is well-intentioned, there are flaws in the way rent relief is calculated. This isn’t a time to be reinventing support measures.
We need to see the return of tried and tested support schemes like the Leasing Code. We know it worked before and that it will work again.
Now, we have a patchwork quilt of supports with federal Covid disaster payments and a laundry list of various business support from the states – without an ongoing commitment post-lockdown. While these measures are welcome, they fail to offset rents – the biggest ongoing cost for a business.
They also fail to protect business from being evicted if rental payments are not met – again running the risk of collapsing businesses that are innocent victims of the ongoing lockdowns.
In a country that does not have a national approach to leasing, we are calling on the federal government to reinstate the Leasing Code of Conduct and get agreement from the states and territories to apply it.
Otherwise, we can certainly expect to continue to see more ‘‘for lease’’ signs littering our local shop fronts. Most of those businesses will never return and new businesses that replace them will take years to build.
This is an avoidable tragedy. Let us act now to secure our small business survival.
Paul Zahra is the CEO of the Australian Retailers Association.
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