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Tasmanian Government Stimulus Package

The Tasmanian Government has announced two economic support packages to date. Many of these measures are aimed at small and medium sized businesses that are the backbone of the residential building industry and critical to the health of the economy.

There are measures aimed specifically at the building and construction industry including:

  • Acceleration of the $50 million for the maintenance of public buildings (eg affordable housing, schools, health centres etc) over the next 12 months;
  • Two year extension of the $20,000 First Home Owners Grant for new housing;
  • $2.1 million for one-off $5,000 grants for businesses that hire an apprentice or trainee, complementing the Federal Government’s apprenticeship package;
  • A payroll tax rebate for one year to businesses that employ a young person aged 24 and under;
  • Small to medium businesses affected by COVID-19 with an annual payroll of up to $5 million will be able to apply to waive their payroll tax payments from March to June 2020.

Small business support measures in the second package include:

  • Quarterly relief on electricity bills to most small business customers including a waiver on their first quarterly bill issued on or after 1 April 2020;
  • For all businesses on regulated tariffs, electricity prices will be capped for 12 months;
  • Freezing of water and sewage prices for 12 months;
  • Waiving of fees, charges and taxes including land tax for 2020-21 for businesses shut down or severely impacted;
  • Increasing the $20 million interest-free loans introduced in the first Stimulus Package to $50 million and extending the eligibility for business loans to all businesses with a turnover under $10 million per annum;
  • Establishment of a $60 million small business grants program comprising an emergency fund that provides immediate cash support of $2,500 for businesses suffering financial hardship.

Medium business support measures have also been included in the new package with the most significant being the waiving of payroll tax liability for all Tasmanian businesses with a payroll of up to $5 million for the entire 2019-20 year.

In addition, the Government has proposed a Rapid Response Skills Initiative with individuals who have been stood down or lost their jobs able to access immediate support to connect to work or training. While up to $3,000 will be available to individuals to gain new skills or licences to help them into a new role.

Commercial tenancies

On 9 April 2020, the Premier issued a Notice under section 22 of the COVID-19 Disease Emergency (Miscellaneous Provisions) Act 2020.

Immediate halt to terminations for unpaid rent or other moneys for certain commercial tenants

A landlord cannot terminate a commercial lease for unpaid rent or other moneys with a tenant that has business turnover of less than $50 million where that business is also eligible for the Commonwealth Government’s JobKeeper program.

This applies to any commercial lease that was in place at 1 February 2020 or which commenced prior to 9 April 2020 and will be in place until at least 30 September 2020.

Immediate suspension of rent increases (except for turnover rents) for certain commercial tenants

A landlord cannot increase the rent of a commercial tenant with a business turnover of less than $50 million where that business is also eligible for the Commonwealth Government’s JobKeeper program.

The only exception to this is for leases where rent payable is linked to the turnover of the tenant.

This applies to any commercial lease that was in place at 1 February 2020 or which commenced prior to 9 April 2020 and will be in place until at least 30 September 2020.

Introduction of a Code of Conduct for commercial tenancies

The Tasmanian Government will introduce legislation to give effect to the Code of Conduct for commercial tenancies announced by the Prime Minister on 7 April 2020.

A key principle of the Code of Conduct is that loss associated with the reduction of turnover experienced by tenants should be shared between tenants and landlords.

The Code of Conduct outlines how commercial tenants and landlords will work together during the period it is in effect. This will be until 30 September 2020 and can be extended if necessary.

The Code of Conduct will:

  • prevent termination for unpaid rents and rent increases
  • allow for the waiver or deferral of rent and other charges, and
  • ensures that relief provided by Government and financial institutions is shared by the parties.

The Code of Conduct will be supported by mediation arrangements.