Melissa Lee
Wellington, September 3, 2021
It is pretty terrible that the government has refused to provide practical relief to the tens of thousands of businesses around New Zealand still being forced to pay full commercial rent while business owners and staff are required to stay home and unable to earn any income for their families and their futures.
From Restaurateurs to Retail services in malls, shopping centres and other lease arrangements, there are many around New Zealand deeply suffering from the decision by this government not to act.
We know that a majority of nations in the OECD have offered a form of rental support for SMEs who are facing significant hardship due to ongoing costs and a dried-up revenue streams and, frankly, it seems heartless that the New Zealand Labour government has turned their noses at such a policy so far.
Yesterday (September 2, 2021), my Parliamentary Colleague, Andrew Bayly, the Opposition’s Shadow Treasurer, announced National’s plan to support businesses with a cohesive Rental Support Package (you can read it here) designed to help more SMEs (Small and Medium-Sized Business Enterprises) survive while we face uncertainty as to how long the wider Auckland region must remain at Covid-19 Alert Level 4, let alone until the nation as a whole sees a return to the semblance of normality we were experiencing only a fortnight ago.
National’s plan would re-prioritise emergency arbitration for tenants and landlords, it would see SMEs who have seen a 40% reduction in their revenue streams under Covid-19 Alert Levels 4 or 3 be entitled to 50% of their assessable rent and associated building operating costs being paid by the Crown. This would be provisional on the landlord contributing a 25% discount on the rental costs for the duration of time such support was paid leaving just 25% of the rental costs to be paid by the tenant.
This Rental Support Package is a fair one in the uncertain times we are in across New Zealand and it has been backed by leading industry organisations such as Business New Zealand and their Employer & Manufacturing Partner organisations, Retail New Zealand, Hospitality New Zealand, the Restaurant Association of New Zealand and the Franchise Association of New Zealand.
Too many ethnic businesses have already been forced to close their doors due to the heart-breaking loss of our world-leading tourism sector and significant difficulties getting skilled staff for their companies during the global pandemic. We have to do everything possible to help New Zealand storefronts across the nation being resilient and able to return to trading when able to do so.
I was appalled that this government is carte blanche refusing to accept a small-town economy’s row of shops being open for trade is better for the local community and their health & safety than that community driving dozens of kilometres to the nearest ‘big brand’ supermarket, sometimes over an hour away.
I want to highlight this exchange from the hearing because I think it sums up the government’s view of the situation perfectly:
Melissa Lee: “… have you done any work in terms of businesses in places like malls because they cannot actually operate—whether it is actually a clothing store or a sushi shop or whatever, they cannot actually operate—and yet they are being hammered by landlords chasing them for rent when they can’t even operate? What kind of support are they actually getting in terms of [this]—are they getting interest-free loans to actually help them through? Because it has been a tough year, I mean, considering last year’s lockdown and now. Once again a lot of the people who are operating out of malls seem to be faced with, you know, rent is astronomical, and they’re being chased every day in some circumstances?”
David Clark: “The business resurgence payment is there for overheads like rent and the like; so there is certainly that mechanism in place. Last lockdown, the pressure in that area increased over time. That’s not something I’ve received a lot of reports on yet, but, again, I would encourage businesses to have conversations with their landlords, and one expects that reasonable agreements will be struck. But those resurgence support payments and wage subsidy payments are there for a reason: it is because we want to support these businesses through this time.”
For the benefit of those reading this who are not familiar with how much the business resurgence payment is, it is the lesser of “$1,500 plus $400 per full-time equivalent (FTE) employee, up to a maximum of 50 FTEs or four times (4x) the actual revenue decline experienced by the applicant.”
The average commercial prime facing rental in Auckland CBD is $512 per sqm, we are now well into Week 3 of Covid-19 Alert Level 4 conditions with no end in sight for the Auckland region. The wage subsidy package simply can’t on its own sustain these businesses’ significant financial pressures. The math is clear, ethnic businesses and all New Zealand SMEs need a Rental Support package now so our SMEs can sustain themselves and reopen again – soon.
Melissa Lee is a Member of Parliament on National List and the Party’s Spokesperson for Broadcasting & Media, Digital Economy and Communications and Ethnic Communities.
