No to rent subsidies for business

The Government appears to have ruled out subsidising the rents of businesses that are struggling because of the Covid-19 pandemic, or demanding a rent freeze.

But it is considering a law change that would place a greater onus on landlords to negotiate with their commercial tenants.

Justice Minister Andrew Little said the Government knew many businesses, especially smaller ones, had been hit hard by a drop in revenue and were struggling to meet fixed costs.

‘‘We had heard the call to subsidise rent or to freeze rents.

‘‘However both of these approaches would have meant commercial property owners would have had their income protected at a time when no one else enjoys that privilege,’’ Little said.

Cabinet’s economic development committee had instead discussed changing the Property Law Act ‘‘to support New Zealand businesses in managing their rents’’, he said.

‘‘We have already announced we will amend the Property Law Act to push out deadlines on lease terminations, but it is clear from information we have received this alone is not enough in many cases,’’ Little said.

Little said the lockdown had affected businesses in different ways and it wouldn’t be fair to have ‘‘one solution’’ such as a rent freeze in every situation, ‘‘especially when in many situations landlords have already agreed to rent reductions’’.

Nevertheless, landlords needed to share the burden of Covid-19 fairly with their tenants, he said.

Auckland Chamber of Commerce chief executive Michael Barnett took heart from the fact ‘‘the door is open to recognising there is an issue’’.