Ms PATTEN (Northern Metropolitan) (15:40): I would like to rise to speak to the COVID-19 Commercial and Residential Tenancies Legislation Amendment (Extension) Bill 2020.
As we know, in March 2020 we saw businesses across this state closed, and it was not their fault, nor was it the fault of anyone. It is a virus, it is a pandemic, and we have all been learning to deal with it. We have all been learning to work with it, but it is hard.
I know that many of us will have received correspondence from constituents from all walks of life talking about how they are struggling getting through this pandemic, whether that is mental health, whether that is trying to juggle work with staying at home and teaching the kids, whether that is just putting on the extra pounds that the pandemic seems to have forced upon us all.
We are all struggling in our own ways, whether that is living alone or, in these cases, whether you are struggling paying the rent, paying your mortgage or in the really desperate situation of trying to work out what the future of your business might be, and for many people that is still uncertain.
We feel like we are seeing some light. Spring has kind of brought earlier mornings, and certainly when we are doing the daily refresh, refresh looking for the new numbers that come down on COVID and seeing that 14-day average reduce I think we are all feeling slightly more hopeful that we are hopefully coming to some form of COVID normal. Certainly it is lovely to see that regional areas will be opening up this week—good on you, we will be watching from here. Send us the photos when you go out and have a glass of wine at a bar.
But we know the sad truth is that while we are saving lives we are actually seeing a lot of businesses die. We are seeing a lot of people struggling, and certainly for me as a member for Northern Metro it is the CBD, it is the inner north, it is the bars, it is the restaurants and it is the live music venues that actually cannot see the end because, you know, they thrive on people getting up close and sweaty in a lot of those venues, and that is not going to be a reality for quite some time.
So I think this bill, this extension, does go a long way to giving some people hope, and certainly I have had emails from people who were nervously awaiting the end of September when some of the rent relief that had been committed to in the earlier legislation would expire. I think this does give some certainty and give some assurance to some of those tenants, both residential and commercial. However, we are going to have to keep opening the chequebook. Certainly this is going to be a time when that book is going to have to stay open and we are going to have to keep supporting—financially supporting—our small businesses in this state. And that is going to go for quite some time.
I think this bill does do that. This bill does extend those operations and aspects of the COVID-19 Omnibus (Emergency Measures) Bill 2020 that did provide some moratoriums on evictions and provide some suspensions on rent increases. As we saw, it also provided some rent relief for people who have been doing it tough.
Certainly I know that the small business commissioner has never been busier. I met with her a few weeks ago, and she was telling me that last year she had 200 retail lease dispute applications. So far this year she has had 7500 inquiries, 426 applications, and 1000 are still going through the process. She has also issued 18 certificates where landlords have refused to mediate.
But as I said, while many welcome this, it does not go far enough. We have certainly heard from other speakers who have told personal stories of some of the people in their regions. I have been speaking to one of the owners of some of the very popular laneway bars here—Ferdydurke and Section 8. Maz also represents the Australian Venues Association. They really put forward the picture for them—the desperation and sometimes it was the shattered dreams. These are people who live and breathe hospitality. It is their creative juices that are the lifeblood of this city. It is what keeps us up at night, literally. One day—hopefully I will not be too old to stay up that late at night—I hope to be part of that vibrant scene that I miss so much.
It has been very difficult for them, and it is not because they have made poor business decisions; we know that. These are really smart operators. It is just this pandemic. But for some of those business owners, when they entered into those leases they signed a personal guarantee, and that basically put their family home on the line. They cannot see a way out of this now. They are really fearful that they are going to not only lose their business and their livelihood, but then also lose their personal assets. Some of that is just to pay the rent to the landlord.
I was speaking to one late-night venue. She pays $90 000 a year in public liability insurance. When she has got three storeys of people in the venue and it is heaving, you can understand that. But it has been empty, and it will be empty for another 12 months. But to maintain her lease she must pay her public liability insurance. This is something that I will certainly take up with the government at another time; I do not think this bill is quite the time to do that.
We have also heard of landlords who have been resistant to mediation, and they have got no leverage to negotiate. In the city we have buildings with many storeys—
A member interjected.
Ms PATTEN: Yes, it probably was that one. It has been going for a while.
I know many of you have spoken about this earlier, but it is not only tenants that are under pressure; it is landlords as well. There is the cartoon character of a greedy landlord, with hessian bags with dollar signs on the outside, screwing the small business operator. But that is not the case most of the time. In fact, the vast majority of landlords have invested in those properties. They are small investors quite often. This could be the only property they have, and they have had it really tough.
As an aside, I just had an email from one such landlord who is selling his house because he just cannot afford the mortgage and he cannot get rent. While we might think that landlords have been rorting the system, there certainly have been tenants that have been rorting the system as well.
This is not about landlords versus tenants. This is about trying to find a line that is fair to everyone, recognising that this is trying to keep Victoria afloat until we can reopen.
For many of the businesses that I have spoken to this is just proving so difficult for them. Carlo is an operator who has three venues in the city. He has been able to negotiate well with some landlords but not with others, but his problem is that he has got three venues, two of which will probably never open again—well, certainly not in the foreseeable future because he will not be able to operate in a COVID-normal time. I understand that, and I appreciate that the way that we are going to have to live for the next while is not going to be conducive to some businesses.
The government is using levers, and I do commend them for the levers that they have been using. I really feel like the Treasury doors have been open, and those piles of gold that are hidden in there are being handed out. But I do think that there are some ways that we could go further. I do not want to see people having to liquefy their assets to pay their rent on a property that is not worth the rent that they are paying, and certainly this has been the case and this has been very difficult. I have been trying to work out a way that we can give tenants some leverage to negotiate with their landlords, because their landlords at the moment can just say no. They have very little negotiating power in a lot of these cases. The small business commissioner has talked to me about how generally that has not been the case and how generally most people are trying to do what is best for their tenants and the tenants are trying to do what is best for their business and for their landlords. They are coming to the table in most cases. I have drafted a number of amendments, which I would not mind seeing circulated now.
Fiona Patten’s Reason Party amendments circulated by Ms PATTEN pursuant to standing orders.
Ms PATTEN: Effectively there are three sections to these amendments. What we have tried to do is specify in greater detail the terms of the types of rent relief available. This might extend to things like rent reductions to current market rates. It is to look at, actually, what is this property worth today—not what this was worth three years ago when you signed that three-by-three lease but what it is worth today? Also, how can we negotiate to exit a lease that does not mean going into bankruptcy, because that is what a lot of them are facing? The only way that they can get out of their lease is to go bankrupt or to sell their family home, so how can we negotiate that better? But also, the third section of my amendments specifies that we need to recognise that landlords experience financial hardship, and it can be significant financial hardship. In these amendments I am also putting in place the ability for the landlord’s financial hardship to be taken into account, to be seen, as well as the tenant’s financial situation.
We are not in a time when we can be trying to achieve perfect, but if we can achieve some good, I think that is where we should be going here. I think that these amendments go to finding some practical solutions, and they have been raised by so many tenants and landlords who have written to me over the last month. I have not been able to recognise them all in this, but I know that many of them will be watching today and watching what measures and what hope this bill will bring to them and how they can start preparing for the next steps in their business. Some will not be happy steps, and some will be different steps. We know many of them will be looking for very different and creative ways to go forth and prosper and do what they love doing.
I would like to thank the minister’s office. We have been going back and forth with the minister about this, and I have been pleased with their reasonableness and recognition that this is difficult. We recognise we do need to find flexibility, and sometimes legislation does not allow for the flexibility of life and the flexibility of businesses that we do see, but certainly the minister and the minister’s office have been very willing to listen and to work with me on this. I will certainly be looking at these amendments during the process of committee, and I commend the bill.
