Prime Minister Scott Morrison said late on Sunday that a series of principles had been agreed at Sunday’s national cabinet meeting to underpin and govern intervention to aid commercial tenancies.
“The most significant of those is that states and territories will be moving to put a moratorium on evictions of persons as a result of financial distress if they are unable to meet their commitments,” the PM said.
According to a press release posted to the PM’s website, other principles include the reduction or waiver of rental payment for a defined period for impacted tenants and the ability for tenants to terminate leases and/or seek mediation or conciliation on the grounds of financial distress.
Mr Morrison confirmed that work is currently being done by federal Treasurer Josh Frydenberg and his state and territory counterparts on commercial tenancies, with details to be announced shortly.
But he underlined the need for landlords to work with their tenants and banks on solutions now.
“We need you to sit down, talk to each other and work this out about looking at the businesses which have been closed, businesses that may have had a significant reduction in their revenues, and we need landlords and tenants to sit down and come up with arrangements that enable them to get through this crisis,” the PM said.
“There is no rulebook for this. We are in uncharted territory, but the goal should be shared. And that is a business that can reopen on the other side, not weighed down by excessive debts because of rental arrears.”
He added that the banks are expected to help landlords achieve this outcome.
And on Monday morning, the Australian Banking Association (ABA) announced that banks are teaming up to block landlords from evicting businesses by offering six-month loan repayment deferrals to an additional 30,000 businesses across the country.
Australia’s banks have agreed to expand their support to an extra 30,000 businesses by raising the threshold of those who qualify for a six-month deferral of loan repayments from the initial $3 million announced by the Australian Banking Association in March to up to $10 million in total loan facilities.
While the new measures apply to all sectors of the economy, on an opt-in basis, the ABA confirmed that commercial property landlords will be asked to provide an undertaking to the bank that for the period of the interest capitalisation, they will not terminate leases or evict current tenants for rent arrears due to the pandemic.
Wage subsidies on the cards
As well as rental assistance, the Prime Minister hinted that a wage subsidy could be introduced on Monday to help businesses deal with the economic fallout of the coronavirus.
“The package would support those who have more recently been the victims of these closures that have taken place and we will be seeking to support people involved in those closures, but we will advise further details of the starting point about that, but yes, I can confirm that is understood to pick that up because you want them to stay connected to their businesses as well,” the PM said.
While not providing any further details, the PM did add that the “Treasurer and I will be looking to making an announcement on that as soon as we can”.
“It is not that far away, but we want to be sure that when we do it, we have covered the majority of the ground that needs to be covered to enable the program to be successfully implemented in partnership with those businesses, which will extend beyond what has been the level of coverage we have had to date.”