'Spreading the pain': Finance Minister Mathias Cormann warns landlords they will have to grant rent relief through the coronavirus crisis

AAP Image/Mick Tsikas

Finance Minister Mathias Cormann has flagged that commercial and residential landlords will have to wear some of the “pain” by granting rent relief due to the coronavirus economic downturn, as governments prepare to lead by example and waive rent for business tenants.

Ahead of a national cabinet meeting of federal and state leaders, Senator Cormann also flagged a third economic rescue package would be announced in the “next few days”, on top of the $189 billion in government spending and central bank lending measures taken so far.

After today’s video meeting of the prime minister and premiers, governments are expected to lean on landlords to give relief to commercial and residential tenants who lose business and employment income due to large swathes of the economy going into virtual shutdown.

States will move to prevent the eviction of residential tenants.

In return, the governments are considering relief for landlords such as concessions on negative gearing and land tax.

The Morrison government is leading the discussions and more focused on commercial rental issues, whereas the states have chief responsibility for residential rental rules.

Senator Cormann said there would be announcements “very soon” on rental obligations for people and businesses that lose significant amounts of income so they were “in the best possible position on the other side for a strong recovery”.

“Many businesses are facing a perfect storm – a significant drop off in revenue, at the same time as fixed costs. One of the big fixed costs is the rental obligations,” he said on Sky News on Friday.

“We’ve got to continue to come up with sensible, pragmatic solutions – spreading the pain to a degree to ensure that we all have the best possible chance to get through this,”

Governments are a significant owner of commercial property such as offices and other buildings that are leased to businesses.

“Governments state and federal are themselves landlords and I think there is an opportunity for governments state and federal to lead by example in the terms of the way we conduct ourselves vis-à-vis our business tenants,” Senator Cormann said.

“Some of that property is leased out to business and I think there is an opportunity for governments to lead by example in the context of landlords all around Australia in terms of what is required over the next few months.”

Billionaire retailer Solomon Lew on Thursday vowed not to pay rent to shopping centre landlords after its stores shut 6pm on Thursday until April 22.

Lew’s listed investment vehicle Premier Investments, owns stores such as Just Jeans, Portmans and Smiggle, and stood down all of its 9000 employees, except for a small team required for essential work.

This story originally appeared in the Australian Financial Review. Read the original story here.

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