Letter to Member; Tenancies, Higher Education, Preschools, Small Business Loans and Business Confidence (14 April 2020)

April 14, 2020

Dear Member/Friend

TENANCIES 
Following the Federal Government’s announcements in relation to tenancy hardship, the NSW Government, over the Easter break, announced $440 million in relief for renters and landlords. The measures are to apply to commercial leases where the tenant is in financial stress as a result of COVID-19. See the link to the Media Release: https://www.treasury.nsw.gov.au/media-releases

Key Features of the Package
The NSW Government will:

  • Exact the National Code of Conduct which in part provides for a ban on the termination of a lease for non-payment of rent, requires landlords and tenants to negotiate rent relief agreements and imposes a freeze on rent increases;
  • Provide a six (6) month $440 million rental support package;
  • The rent relief is to be provided through land tax waivers or rebates, which are to be split evenly between business and residential landlords. $220million each;
  • Commercial tenants will be offered the land tax concession if they pass on the savings through rent reduction;
  • Eligible landlords will be able to apply for a land tax concession of up to 25% of their 2020 calendar year land tax liability. Additionally there is a further land tax deferral for any outstanding amounts for a 3 month period for landlords claiming tax concession;
  • Provide a moratorium on applications for forced evictions due to rental arrears. Tenants will be protected from eviction until the NSW Civil & Administrative Tribunal is satisfied that negotiations have concluded;
  • As with the Federal tenant provisions, the tenant must have a turnover of less than $50 million and experience at least a 30% reduction in revenue as a result of COVID-19. Where a household is having difficulty paying rent there is an obligation for both parties to negotiate.

This policy - from the Media Release - is complex. The detail is yet to emerge. Significantly, as with the Federal package, landlords and tenants are required to discuss and negotiate rent reduction.

HIGHER EDUCATION RELIEF PACKAGE
On 12 April 2020 the Federal Government announced a Higher Education Relief Package. See
https://ministers.dese.gov.au/tehan/higher-education-relief-package for the Media Release. Key points are:

  • The Government will slash prices/fees for short on line courses provided by universities and private higher education providers.
  • The courses are to commence at the beginning of May and will initially run for 6 months;
  • The Government is to guarantee university funding at existing levels, even if there is a fall in domestic student numbers;
  • Tertiary and international education providers will receive regulatory fee relief in order to better support domestic and international students;
  • There are also to be exemptions from loan fees under FEE-HELP and VET student loans;
  • The package will help universities and private providers as well as help people who have lost their jobs or are looking to retrain;
  • There is to be significant regulatory and fee relief provided to the vocational education and training sector as well as higher education.

NSW FREE PRESCHOOL FEES
On Thursday 9 April 2020 the NSW Government announced a package in relation to preschools. Here is the link: https://www.treasury.nsw.gov.au/media-releases   Key points are:

  • Parents will not have to pay preschool charges/fees for up to six (6) months under a $51 million package;
  • The Government also committed up to $82 million to support 260 Council Child Care Centres that are not eligible for the Federal JobKeeper payments;
  • The funding is to provide care for 45,000 three (3) to five (5) year old children;
  • The NSW package complements the Federal Governments Childcare package.

SMALL BUSINESS LOAN APPLICATION
Here is the link for the Small Business Loan Application through Service NSW: https://www.service.nsw.gov.au/transaction/apply-small-business-covid-19-support-grant

BUSINESS CONFIDENCE
Please see the text from an email from Business NSW on 9 April 2020 in relation to business confidence in NSW. It is what you might have expected.

COVID-19: NSW BUSINESS CONFIDENCE CRASHES

Businesses are scrambling to make rapid changes to adapt and survive the economic impact of COVID-19, according to the latest quarterly Business Conditions Survey, released by the state’s peak business organisation, Business NSW.
 
The special COVID-19 edition of the survey, which attracted almost 2,000 respondents from every part of the state, clearly shows the nature and extent of the impact that multiple economic shocks have had on the NSW economy over the first quarter of 2020.
 
“The responses from business owners across the region are no surprise, but at the same time make for very sober reading,” said Business NSW Regional Manager, Joe Townsend.
 
“The survey shows the transition from early-phase impacts relating to supply chain interruptions and reduced overseas visitor arrivals to the full-scale economic crisis we are now seeing,” Mr Townsend said.
 
“Business conditions have deteriorated rapidly. There was a doubling of COVID-19 related revenue losses reported by respondents between weeks one and two of the survey period.
 
“Businesses have had to enter hibernation with significant adjustments to staffing levels and capital spending, and it’s clearly the case that some won’t make it through to the other side.
 
“The impact of COVID-19 on confidence is most apparent when examining business expectations for the next quarter where confidence has fallen at an unprecedented rate.
 
“While COVID-19 represents the most significant threat to the economy, some regions and industries have also been acutely impacted by other factors, such as bushfires and drought, which have had a concentrated impact in some parts of NSW.
 
“Businesses in the Capital Far South and New England areas were also severely affected by the 2020 bushfires and drought and have now been hit with this pandemic.
 
“To date, the business impacts of COVID-19 are, so far felt the heaviest in the tourism industry, including Arts, Recreation, Hospitality, and Accommodation. The staffing and capital spending indicators have fallen sharply suggesting businesses are no longer investing and are in the process of reducing staffing costs.
 
“All of these trends are consistent with what has been observed through Business NSW’s daily engagement with businesses over the past month and why it’s so important that every tier of government do all that is possible to keep businesses in operation and staff employed.
 
“When given the all clear to resume normal business operations, we need to be in the best possible position to do that as quickly as possible”, Mr Townsend said.”

The Chamber will continue its efforts to help you get through this crisis and to restore business confidence. In the meantime stay well and stay distant.

Best wishes,

Anthony

Anthony Fox
President
Armidale Business Chamber
afox@foxlegal.com.au
m. 0402 838 077

PS some of you may receive material directly from Business NSW. I apologise for any duplication.

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