Commercial Tenancy Relief Scheme Extension

The Property Council has called on the Victorian Government to put a hard stop to the Commercial Tenancy Relief Scheme (CTRS) after extending it for two months today, calling out the scheme as a direct and unprecedented Government intervention in commercial contracts and the legislated transfer of income from one part of the business sector to another.

Victorian Executive Director Danni Hunter said the extension of the CTRS was not fit for purpose for the new phase of the pandemic as Victoria leaves lockdowns behind and progresses into the next phase of living with the virus.

"Victoria has passed the critical economic emergency phase of the pandemic and extending the CTRS is simply an inappropriate measure and burden on one part of the business community which has already provided significant financial assistance and support to the small business sector.

"This decision and the basis of the scheme must be called out – it is direct government intervention into legal contracts and a compulsory transfer of income from one business and sector to another," said Ms Hunter.

"Despite the extended CTRS being more targeted to smaller businesses, which is welcome, the bottom line is that the Victorian property industry is once again being asked to carry an unfairly heavy financial and administrative load for the small business sector.

"The CTRS is not Government support. It is direct Government intervention into commercial contracts. It is the legislated transfer of income between private entities.

"Such a significant intervention in commercial leases was never acceptable to the property sector and is absolutely inappropriate when Victoria is no longer in lockdown and businesses are able to trade with minimal to no restrictions.

"There must be a hard stop to the scheme when it next expires in March 2022, despite the ongoing and inevitable challenges brought about by the pandemic.

The property sector employs one in four working Victorians and contributes more to state taxes than mining, agriculture and manufacturing combined.

"Last year the property sector was slugged by the Victorian Government with big hikes in land tax and stamp duty as well as a new windfall gains tax on rezoned land. Now it’s been whacked again by the extension of an ill-conceived commercial tenancy relief scheme.

"The Andrews Government must put a hard stop to its reliance on the property sector to do the heavy lifting where it is Government’s responsibility to support the broader community."

Ms Hunter said the Victorian Government must take urgent action to help struggling businesses by promoting a return to the hybrid working model, encouraging hundreds of thousands of employees back to their workplaces and revitalising the CBD and other key precincts.

"Returning to the office, once the current wave has peaked, and increasing foot traffic will be the best way to help struggling retailers and hospitality businesses. This includes getting public servants back to work in significant numbers for the first time in two years."