Ms THEOPHANOUS (Northcote): I am pleased to speak in support of the Commercial Tenancy Relief Scheme Bill 2021, which will deliver much-needed support across the state as well as to local businesses in the Northcote electorate. Over the past 18 months I have spoken with countless businesses in my community across Zoom meetings and round tables and phone calls and chats in the street. I have made it a priority to actively reach out and share information and advocate for our business owners, and I continue to be in awe of our local business community, who have not only shown immense resilience but have also continued to support their communities—our community—with immense compassion and care. We have seen businesses that are themselves struggling donate towards food relief programs and provide free meals to residents in need. We have seen creative industries and social enterprises—among some of the hardest hit during the pandemic—continue to care and provide for the health and wellbeing of the communities they serve.
We have always known that our small business community is essential to our economy. They create jobs, support families in the Northcote electorate and in particular they are the backbone of our thriving High Street, Station Street, Gilbert Road, Miller Street and all the other precincts across our suburbs. Over the past year and a half it has become even more clear that they are also a big part of what gives our suburbs strength and vibrancy and creates that sense of shared experience and identity that we are so proud of in Northcote. They have supported us and they have supported our community, and they deserve our support too. I have been really pleased to see so many of my local businesses accessing financial support through our numerous Victorian government programs. I know that for many it has made the difference between being able to keep the lights on and closing the doors for good.
For me it has also been important to hear from business owners about the key pressure points that they are facing. Every sector and every business is unique. From the many creative microbusinesses in Northcote to our vibrant hospitality and live music scene, our quirky retailers, our gyms, our breweries, travel agents, pet groomers and community support organisations, each has their own pressure points and challenges, and I have been working closely across sectors to communicate their needs, to clarify and expand the eligibility requirements in some cases and to look for creative solutions to the ongoing, complex challenges that we are all facing.
One of the key challenges raised with me regularly by businesses is the financial burden and stress of meeting commercial rental payments. From businesses with huge spaces, like the amazing Twisters Gymnastics or Moon Dog World, to those with small spaces and workshops, this has been a pressure point that is very real and a source of significant stress. The previous commercial tenancy relief scheme played a big role in helping many local Northcote electorate businesses survive to this point. It provided a strong framework for tenants and landlords to work together and reach fair outcomes, supporting jobs and allowing businesses and landlords to get through successive lockdowns. Fortunately we are now in a position to reduce restrictions, and businesses can start to reopen, but the impacts of the pandemic have been profound and they are ongoing, and we do not know what the future holds. Many businesses are still trying to recover and to balance tighter margins with looming deferred rent. Frankly it is stressful out there and it is volatile out there. Our small businesses deserve our protection, and that is exactly what we are delivering in this bill.
Fundamentally the bill enables us to reintroduce the scheme that made such a difference last year. It is intended to be as close as possible to the original scheme, with some necessary changes made now that the commonwealth government has ended JobKeeper. The scheme will run until 15 January 2022 and the act will cease on 30 April 2022, so it is giving ongoing certainty to our business community and landlords as we fight this wicked virus. Like last year, the scheme will provide support to small businesses with a turnover under $50 million that have suffered a decline of at least 30 per cent in their turnover. Over the past year we have seen many tenants and landlords work together proactively and with compassion to reach fair agreements around rents. The reintroduction of the scheme sends a strong message to both landlords and tenants to continue in that spirit, and we expect that many will continue to work directly with one another to achieve fair outcomes. Where difficulties do arise—and they do—and an agreement cannot be reached, this bill makes sure that supports are in place to help businesses negotiate a fair agreement. Either party will be able to refer the matter for free mediation by the Victorian Small Business Commission if they need to, and we are providing an additional $3 million in funding to the commission to make sure they have the resources they need to meet the extra demand.
As I mentioned, there will be some changes to the scheme to account for the premature end of JobKeeper and to strengthen its operation. A key change comes in regard to eligibility—unlike last year, JobKeeper is not a criterion for eligibility. Instead businesses will need to show evidence that they have experienced the required drop in turnover. This will generally be acquitted just through a standard letter from a practising accountant. Importantly, the scheme will provide protections for many small businesses, with landlords not able to evict a tenant for non-payment of rent unless the parties have attempted mediation, and rent increases will also remain suspended during the extension.
We are building on the learnings from last year to help ensure this is as simple a process as possible for our small business community, who we know are already under the pump, so we are working to reduce the administrative burden and provide clarity on the process for both tenants and landlords. Rent relief will be calculated by comparing the turnover for the final financial quarter in 2020–21 with turnover from the final quarter of 2018–19. This will also be used to calculate the amount of rent relief available to the tenant. Special arrangements will also be in place for businesses that were not operating then. Incredibly, in the Northcote electorate we have seen a number of amazing businesses open over the past year, like the wonderful PavQueen down in Alphington or Zsa’s bistro in Northcote. They have opened up during the midst of a pandemic, which is quite remarkable. Some have pivoted their businesses in response to the pandemic and others have steamed ahead to create new local enterprises we are already coming to know and love, and they are creating new local jobs in the process. It is critical that these businesses do not miss out, so I am immensely pleased to see that they will be provided for under this scheme.
We know that many tenants accrued significant deferred rent last year. The new regulations will include an ability for a tenant to pause their payments on previously deferred rent until 15 January 2022 if they require further rent relief to enable their business to survive through this very difficult period. This will also help ensure our businesses can survive and grow and support local employment in the process. Just a note on our local landlords—I also just want to say thank you. I know many of you have been doing the right thing, working closely with your tenants to support fair outcomes, and I know that in doing so you are making your own sacrifices. You too are taking on the burden of keeping us all safe. Recognising this, we are working to ensure your feedback is addressed in the reintroduced scheme, and we are delivering an $80 million hardship fund for commercial landlords that face hardship from providing that rent relief to tenants that they so desperately need. We are also providing land tax relief of up to 25 per cent to help ease the cost burden for those doing the right thing.
Of course the support delivered through this bill is not a standalone measure. It builds on the unprecedented support provided by the Victorian government to businesses across the state over the course of this pandemic. From day one we have been committed to supporting our small business community. More than $7 billion in financial support has gone out to businesses, with $940 million delivered over the May–June lockdown alone. This is not to mention the recently announced $400 million jointly with the commonwealth. Specific supports have assisted our creative, licensed hospitality, live music and other industries facing unique challenges, and we have a lot of those within the Northcote electorate, so for that I am very grateful. We know that no amount of support can take the place of being fully open for business, no amount of support can change the fact that we have been living through a pandemic and no amount of support can wholly make up for the inherent challenges and risks and ups and downs of running a small business, but our small business community has done a remarkable job so far, and as a government we must continue to put in place the parameters that allow them to set up arrangements that are fair and will get them to the other side of this. I will keep working closely with our small and micro businesses as well as our local creatives and other businesses to make sure their needs are understood and that they are getting the support they need. In closing, I just want to thank every local supporting our small business community as well.
