The Victorian Automobile Chamber of Commerce (VACC) applauds the Morrison Federal Government and Andrews Victorian State Government who have continued to react prudently in launching relief packages for community and businesses. The tough decisions continue to be made for the health and wellbeing of the community and industry.
This week we have seen a strategy introduced by both governments that focuses on support for industry. For instance, the JobKeeper Payment has allowed some business owners to breathe a little easier in the short term. On the local front, VACC looks forward to what the Victorian Government’s Crisis Council of Cabinet (CCC) can further add that will have positive outcomes for community health and automotive industry confidence.
Keeping people in jobs, attempting to stave off a long and retracted economic recession and keeping businesses alive, with a chance to once again thrive, is the ultimate outcome for VACC and government. To do this, all stakeholders must be on the same page. However, there is one complicated and as yet unresolved battlefront that is looming large: The commercial tenant versus the commercial landlord.
In last three weeks, staff at VACC, similar to other sector industry groups, are hearing stories from automotive retail participants regarding landlords who are not willing to negotiate on the terms of current rental agreements. Simply put, these businesses cannot hope to survive if no rental relief is granted.
Many businesses who have elected to close for health or economic reasons cannot hope to ever consolidate or grow their businesses if they are burdened with an extended period of unpaid rent. VACC also has members who are landlords, and we must make sure that there are sufficient protections for them as they have invested heavily in their property portfolios.
VACC urges the National Cabinet and CCC to immediately introduce short-term protections for both landlord and tenant that will lead to positive outcomes.
VACC calls on the CCC to assist landlords who have negotiated with their commercial tenants for rent reductions or rent pauses by having that rental amount credited to their future land tax assessments. Not just on businesses who have shut their doors, but all businesses who can show a 30 percent financial downturn (compared to the same period last year).
VACC supports the Federal Government and the National Cabinet in issuing a tenant eviction moratorium, but urges them not to penalise businesses who turnover more than $50 million per annum. This turnover threshold discriminates against 70 percent of new car dealerships. Remember, these are the same Victorian dealerships that are already suffering from a more than 60 percent retail sale downturn that is projected to rise markedly over the next two weeks. These are the same dealerships that do not qualify as a result of thresholds for government cash flow assistance, apprentice wage subsidy or Victorian Government payroll exemptions.
Sufficient protections for both landlord and tenant must be put in place. The important thing is that it must apply to all businesses.
Please continue to lean on VACC for help. We are here for the long term benefit of the automotive industry.
Words: VACC CEO, Geoff Gwilym.