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Rent relief the biggest driver of SME financial assistance

Adrian Flores
Adrian Flores
14 August 2020 1 minute readShare
Rent relief the biggest driver of SME financial assistance

New data reveals that rental relief has been the largest contributor of financial assistance to small and medium-sized businesses, amounting to $1.6 billion nationwide.

The Shopping Centre Council of Australia (SCCA) data found that 84 per cent of total SMEs requested rental assistance to the end of 30 June, with NSW and Victoria accounting for 64 per cent of total agreements reached.

By industry, the largest level of rental assistance has been to cafés and restaurants, followed by retail services such as hairdressers, beauty salons and nail bars. 

The sectors have been noted by the SCCA for being heavily impacted by government restrictions, and are often “small” SMEs such as “mum and dad” businesses.

The relief was provided under the Commercial Tenancies Code of Conduct announced by Prime Minister Scott Morrison on 7 April and adopted by state and territory governments.

SCCA executive director Angus Nardi said the $1.6 billion in rent relief was a larger financial contribution than the land tax concession schemes introduced by state governments.

As a result, Mr Nardi said the SCCA was not in a position to support the Code of Conduct’s extension where the cost of doing so falls exclusively on shopping centre owners.

“We have strived to strike a balance between helping those who need it while at the same time confronting our own financial pressures in the face of ongoing disruptions to regular trading to protect public health,” Mr Nardi said.

“Unlike others, our sector stands alone in having regulation require us to provide direct financial assistance to third parties, which must be financed from our own resources, which are now exhausted.”

Mr Nardi said all members of the SCCA were committed to continuing to work with SME retailers, particularly “small” SMEs.

“It is in our commercial interests as well as the broader economy that SMEs have longevity within our centres, as they provide products and services our customers want and support local jobs,” he said.

“The SCCA conceived the Code of Conduct with key retailer groups, and government should take confidence that the industry can and will continue to work together.

“We have proven our ability to manage a very complex range of negotiations on a case-by-case basis, and our data demonstrates where the greatest need is for future government support for SMEs in the retail sector.”

Rent relief the biggest driver of SME financial assistance
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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