23/04/2020 - 14:35

$154m package to protect tenancies, boost construction

23/04/2020 - 14:35

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A $154 million package to support tenants and landlords and boost the construction industry has been unveiled by the state government, in its latest effort to reduce the economic carnage of COVID-19.

$154m package to protect tenancies, boost construction
Reg Howard-Smith says today's training package would assist in the recovery from COVID-19. Photo: Attila Csaszar

A $154 million package to support tenants and landlords and boost the construction industry has been unveiled by the state government, in its latest effort to reduce the economic carnage of COVID-19.

Premier Mark McGowan today said commercial landlords would be able to tap a $100 million pool of funds if they reduced rent for small business tenants affected by the crisis, while $30 million had been allocated to provide grants of up to $2,000 for residential tenants facing hardship.

The commercial grants will be capped at 25 per cent of the landlord’s land tax bill for 2019-20 for the property where the eligible tenant is located.

Landlords must provide rent relief equivalent to three months’ rent and freeze outgoings to affected tenants, which must have experienced a 30 per cent drop in turnover to qualify.

The scheme will be administered by the Small Business Development Corporation.  

Residential tenants will be able to access grants equivalent to four weeks’ rent, capped at $2,000 and paid directly to the landlord.

Grants will be administered through the Department of Mines, Industry Regulation and Safety, with applications to open May 1.

To qualify, tenants or sub-tenants must have lost their job, applied to Centrelink for support, have less than $10,000 in savings, and be paying at least 25 per cent of their income in rent.

“This is a targeted scheme to provide help to both tenants and landlords of commercial and residential properties,” Mr McGowan said.

“Ideally, this is about looking after small businesses, looking after vulnerable residential tenants and looking after mum and dad investors whose lives have been turned upside down due to COVID-19. 

“It’s the right thing to do and it’s consistent with what has occurred, and in some ways more generous than what has occurred in other states.”

Property Council of Australia WA executive director Sandra Brewer said the $100 million package for commercial tenancies would be welcomed by the sector.

“We have been concerned that many landlords with finance on their assets have had no genuine financial relief, other than offers to defer payments, from banks," Ms Brewer said. 

“This goes some way to giving them cashflow to keep their businesses viable.

“We have seen some great examples of landlords and tenants working together and it's great to see this acknowledged by the State Government and have their assistance in sharing the burden.

Ms Brewer said the industry remained focused on creating its code of conduct for rent negotiations, which will likely be finalised by early May.

“We hope this will be fair and give tenants and landlords clear guidance, while taking the financial position of both into account," Ms Brewer said.

"We are committed to ensuring both tenants and landlords survive this current pandemic.”

Mr McGowan also announced today a $24.5 million package to boost training programs in building and construction, in the form of a one-off payment per employee to employers receiving payments from the Construction Industry Training Fund.

“We must retain our skilled workforce, especially in building and construction,” Mr McGowan said.

“This will make sure jobs are maintained and our construction workforce is ready to assist with post COVID-19 economic recovery.

“This is about plumbers, bricklayers, electricians and the like. This will be part of our economic recovery.”

Building and Construction Industry Training Board chair Reg Howard-Smith said the package announced today looked forward to the time WA comes out of COVID-19.

“The building industry has a long gestation period so activity that’s occurring now, those contracts were signed some time ago.

“When we come out, in some parts of the sector, that could be the difficult period.

“What we are doing today is trying to ensure those apprentices and trainees that are employed remain employed in the period ahead so they stay in the industry.

“The building industry has a reasonable level of activity right now but it’s the months ahead that could be very difficult.”

The new scheme lasts for 6 months, while Mr Howard-Smith said a small working party had been formed to look at whether more permanent measures were needed.

Civil Contractors Federation WA chief executive Andy Graham said it was a timely boost for trainees and apprentices. 

“Our industry is feeling the effects of the crisis, with some projects being deferred and margins and existing projects eroded due to higher costs,” he said.

“This bonus payment will help civil contractors to maintain their workforces as they deal with these financial pressures.

“Access to skilled local workers will be essential in the years ahead as the civil construction sector constructs and maintains the infrastructure needed to keep our state prosperous.”

Master Builders Association WA executive director John Gelavis also welcomed the boost, but said it was critical that the state government identify a pipeline of short- and long-term future work to retain confidence in the sector.

“Refurbishment or maintenance projects would be a good start because some may not require planning or building approvals,” he said.

“The government could commence with minor school maintenance work, then larger asset creation projects like hospitals and healthcare facilities and then infrastructure investment, which supports all Western Australians.”

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