On Sunday the 29th of March, Prime Minister Scott Morrison announced that Australian states and territories will put a six-month moratorium on evictions for both residential and commercial tenants during the coronavirus pandemic. Under these new rental arrangements, “States and territories will be moving to put a moratorium on evictions of persons as a result of financial distress if they are unable to meet their commitments,” said Morrison.
To some tenants, this will come as a relief, as industries see more staff stand downs and redundancies. Having a roof over their heads will be one less thing to worry about. However, Morrison makes it a very clear point, to state that tenants and landlords need to work together now more than ever.
For the next six months, these two parties will need to combine forces to work on a solution that is best for everyone involved. “Now there is a lot more work to be done here and my message to tenants, and landlords is a very straightforward one: we need you to sit down, talk to each other and work this out,” said Morrison.
“[we need you to sit down] so on the other side the landlord has a tenant, which is a business that can pay rent, and the business is a business that can re-emerge on the other side of this and be able to go on and employ people on the other side of these arrangements… ” After also encouraging landlords to seek the help of the banks, Morrison states that “We will be working on measures that will be encouraging you to do just that and to support you to do just that, but also to ensure that if you aren’t going to engage in that sort of co-operative activity, between banks, between tenants and between landlords, then the sort of support that you might otherwise expect to receive, you will not receive. This is part of the hibernation approach.”
These rental amendments come off the back of several other government initiatives to assist our economy through these unprecedented times. Such as;
- Record low interest rate cuts – The Reserve Bank of Australia has slashed the cash rate to a record low of 0.25%.
- A cash injection for banks – The RBA is providing $90bn to the banks at a rate of 0.25 per cent – in line with the cash rate – to ensure a cheap line of credit is available. The RBA will fund the banks at that low rate over three years, and provide additional funding if the banks increase lending to small and medium-sized businesses.
- Loan holidays for households and businesses – The Australian Banking Association has mandated that Australian banks defer the loan repayments of small businesses for six months, to help those that are struggling stay open and keep people in jobs.
- Major stimulus for households and business – The package mainly targets low-income earners and business, with measures including one-off $750 payments and a coronavirus supplement for eligible welfare recipients; while some workers who find themselves without a job will be able to access jobseeker payments. Meantime, small businesses will be able to access wage subsidies of up to $100,000.
These are challenging times, but when this ends, which it will (!), we will come out on the other side as a stronger industry. If we work together and practice our natural characteristic of resilience, we will get through this.