Rent relief conditional on JobKeeper eligibility as Morrison finalises landlord talks

The Morrison government is today ‘refining’ its wage subsidy scheme, just days before the proposal is due to be voted on in parliament, after last Friday confirming long-awaited rent relief measures would be restricted to firms accepted into the $130 billion program.

Draft legislation giving effect to the unprecedented JobKeeper package was circulated with the federal Labor opposition on Sunday night as national cabinet seeks to finalise measures to put large swathes of the Australian economy on ice to ride out the COVID-19 pandemic.

Parliament is expected to pass the JobKeeper law on Wednesday, at which time the Australian Tax Office (ATO) will be empowered to begin administering the subsidies, valued at $1,500 a fortnight per eligible worker.

But there’s a lot more than just wage support on the table for firms applying for the scheme, with Prime Minister Scott Morrison last Friday announcing rent relief measures will be gate-kept behind eligibility for the JobKeeper program.

Morrison said national cabinet had agreed to a mandatory code of conduct on commercial tenancies, which will effectively force landlords to accept rental reductions and waivers proportional to a tenant’s loss in revenue.

The code will also freeze most rent increases, prohibit penalties for tenants that close, ban landlords from passing on land tax and prevent them from charging interest on unpaid rent.

Designed to enable “good faith” negotiations between landlords and businesses, the code preserves Morrison’s desire for parties to come to their own, bespoke agreements about rents.

“There are many different ways you can achieve this,” Morrison said.

“If, for example, there was a three- or six-month rental waiver because a lessee, a tenant would have had to close their doors and there’s just simply no money coming in.

“Then one way to achieve that is to extend the overall lease by six months on the other side, if they’re going to give a rental waiver,” he continued.

But the code will only be mandatory for tenants with less than $50 million in annual revenue that are eligible for the JobKeeper program, compounding uncertainty for firms unsure whether they meet the criteria.

The JobKeeper program requires businesses to show their turnover has decreased 30% against a comparable period of at least a month on last year, else rely on “tax commissioner discretion” for acceptance.

“If you are not a JobKeeker tenant, if you’re just a tenant that hasn’t had a reduction in their business turnover, then your leasing arrangements stand,” the PM said.

In exchange for their participation, state and territory governments have agreed to consider providing land tax waivers and deferrals for landlords.

It comes as utility and insurance companies fall in behind efforts to allow SMEs to pause their bills, leaving commercial tenancy support one of the last remaining cost pressures standing between national cabinet and its small business “hibernation” strategy.

Rent relief was supposed to be announced several weeks ago, but after a delay in negotiations, national cabinet will meet Tuesday in hope of finalising the mandatory code, after which state and territory governments are expected to ratify the plans with legislation.

The Morrison government is also facing calls for the eligibility criteria of the JobKeeper scheme to be extended, specifically to casual workers.

Under current plans, only casual workers with 12 months tenure or more with their employer are eligible for the payments, but the Australian Council of Trade Unions has expressed concern this will leave many people out.

There will be no change to the broad eligibility criteria though, Attorney-General Christian Porter has confirmed.

Speaking to ABC Radio on Monday morning, Porter said there would be no extension for casual workers heading into Wednesday.

“You have to have some kind of guiding limits on the outer edges,” Porter told RN Breakfast.

“We will require regular and systemic attachment to an employer for 12 months.”

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