COVID-19: Rent relief pressure builds on Finance Minister Grant Robertson

Pressure is building on the Finance Minister to provide rent relief for Auckland businesses running out of cash due to more than a month of lockdown. 

Grant Robertson maintains that the Government has helped with rent pressures by expanding the Resurgence Support Payment into a three-weekly payment, but Retail NZ and Hospitality NZ says it's not enough. 

The Resurgence Support Payment kicks in if New Zealand is shifted to alert level 2 or above for a week or more. Businesses can access it if they experience a 30 percent drop in revenue over a seven-day period at increased alert levels. 

Businesses get an income-tax-free base payment of $1500 plus $400 per worker up to a total of 50 full-time employees. The maximum payment a business can receive is $21,500. 

Retail NZ and Hospitality NZ, which represent thousands of businesses across the country, want specific targeted rent support from the Government. 

"The retail and hospitality sectors have been crying out for Government leadership on this issue for 18 months, and nothing is being put forward to help resolve current rent-relief deadlocks," says Greg Harford from Retail NZ.

National MP Andrew Bayly took the issue to Robertson during an appearance before Parliament's Finance and Expenditure Committee. 

"Why have you been so deaf to the demands for rental support?" Bayly asked. "Why have you not dealt with this? We are weeks into this lockdown and you still have not come out with a proper proposal around proper rent support?"

Robertson pointed to the Resurgence Support Payment. 

"Originally it was going to be designed as a one-off payment to help people adjust to elevated alert levels. We've recognised that as the outbreak has gone on that there is a need for further support around the fixed costs area and that includes rents. Therefore we've now made that into a three-weekly payment. 

"Over the two Resurgence Support Payments currently available - we have a further one on its way - we've paid out close to a billion dollars under that payment, so that money is going to businesses to meet that exact cost that you're raising."

Finance Minister Grant Robertson.
Finance Minister Grant Robertson. Photo credit: Getty Images

Bayly said it's not enough. 

"The Resurgence Payment is actually a very modest payment. If you've only got 10 employees you only get $5,500. That's why businesses are going bust. 

"Why don't you just address the central issue which is: our businesses in Auckland are just simply running out of cash?"

Robertson said he's tried to support businesses through the lockdown, and it's his expectation that when we come out, the economy will boom. 

"The approach that we've taken from day one is that the Government will step up and support businesses but not government has ever been in a position to be able to pay the full costs businesses are facing. 

"The other side of the coin is that we know from what happened last time that if we take the strong public health approach, provide the supports that we have, the economy rebounded incredibly strongly to the point that many of those businesses were the ones coming to us saying, 'We don't have enough staff to meet the demand that we've got'."

The Government announced plans this week to ban residential tenancies from being terminated under alert level 4, and force commercial landlords to compromise on rent with their tenants during other alert level restrictions.

"This is a piece of work we did last year but were unable to follow through on," Robertson said, referring to Labour's former coalition partner NZ First blocking a similar approach last year over concerns about interfering in contract negotiations. 

"The survey work we've done shows that around 80 percent of businesses possibly already have this clause, but this is to enable those that don't to be able to have a fair agreement made between the landlord and the tenant and if that's not possible to move through arbitration and mediation processes," Robertson said. 

"So that's another way of helping to deal with those issues."

Bayly said businesses need cash. 

"The rental announcement yesterday will not provide any cash; in fact, it imposes the liability on the landlord."

The Property Council slammed the Government for introducing tenancy termination restrictions "without notice or consultation", with chief executive Leonie Freeman describing the move as "a kick in the teeth for the backbone of the nation". 

"This proposal completely misses the intricacies of commercial leases. Where is the bespoke response for hospitality or retail? Why aren't we focusing on where the need is the greatest?"

Robertson said the Government is "doing the best we can to help" in the current situation. 

"The best thing for New Zealand is to get on top of the outbreak and get us back to working the way we were prior to the 17th of August."