Rent relief welcomed

The Motor Trade Association (MTA) has welcomed an unexpected announcement by the government to drive discussions on rent relief between small businesses and their landlords. 

The MTA says it is among the mechanisms it had called for in a letter to the government at the start of September. 

“Our members have drained their reserves – financial and mental,” says Craig Pomare, chief executive officer. “This mechanism is a good first step to easing some of the burden of rent and other fixed costs. 

“Although there will still be hurdles for small business owners to clear before they see change, and we expect that debating what a ‘fair proportion’ amounts to will create some issues.”

To make the package more complete, the MTA would like to see the reintroduction of subsidised arbitration and mediation services for businesses and landlords, which allowed parties to access up to $6,000 per dispute. 

In this way, September 28’s announcement will be supported with a “safety net” for both parties. “This Covid-specific support ended in March 2021,” adds Pomare.

A recent survey of about 800 of the MTA’s Auckland members found that, due to the lockdown, members are stressed with 28 per cent unsure if they will still be in business at the end of 2021. 

And 42 per cent had been unable to negotiate rent deferrals or relief. Members also indicated that government support payments only cover about half of ongoing expenses, while revenue is almost completely reduced at alert level four. 

The findings of the survey include:

• 66 per cent reduced wages for their staff, mostly by 20 per cent.

• Nearly 30 per cent asked some or all their staff to use annual leave.

• 96 per cent accessed the wage subsidy in August 2021.

• 98 per cent accessed the resurgence payment.

• 63.5 per cent have not negotiated payment deferral or relief with suppliers.

• 42 per cent have not negotiated rent deferral or relief with their landlord.

• 28 per cent are unsure they will still be in business at the end of 2021.