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Commercial Tenancy Relief Scheme Bill 2021

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Sam Hibbins MP
Member for Prahran
4 August 2021

Mr HIBBINS (Prahran): I rise to speak on the Commercial Tenancy Relief Scheme Bill 2021. This bill puts in place essentially the same scheme we had last year, with much of the detail not in the bill but actually left to regulations to support commercial tenants. It will run until January 2022. We will have the rent relief scheme back, and so if commercial tenants have lost more than 30 per cent of turnover, then they will be eligible for a rent reduction, with the landlord eligible for a land tax discount of up to 25 per cent should they give rent relief, with the Victorian Small Business Commission managing the mediation system for landlords and businesses who cannot agree.

Certainly we welcome this bill, though I do acknowledge the criticisms of the timeliness and the fact that so much of it is being left to regulation rather than being put in the bill. But we do need this, because our commercial tenants, our traders and our small businesses—I would like to particularly focus on those in our local shopping strips—have been doing it tough. One of the first things that the Greens and I as a local MP pushed for was support for our local traders when we first had the lockdown in 2020 and making sure that they also had a moratorium on their evictions. Small businesses and traders in my electorate certainly have done their utmost to adapt and to adapt their offerings to fit in with the rules and have been doing their best to follow the rules as well and do the right thing by everyone. But it has been tough for them, and sadly there have been, obviously, many that have struggled. Some of them have simply not been able to stay open, which of course is incredibly regrettable. Our shopping strips are the economic and social hearts of our communities, whether you are talking about an iconic shopping strip like Chapel Street in the Prahran electorate or the smaller ones, the neighbourhood shopping strips right across suburban Melbourne and right across Victoria as well—and of course the CBD as well, which relies so much on people coming in to work.

There are some significant challenges now, long-term challenges, for the CBD as well. But they are still doing it tough, so we welcome immediate relief for them. But it is going to have to now be a focus of government in the long term to adjust to these structural changes in place, and an opportunity as well for focused support for our shopping strips.

Even before the pandemic, a place like Chapel Street had, I guess, its ups and downs and was cyclical in terms of vacancy rates. Certainly when vacancies rose people would often come to me, and it was one of the significant things that people would come to me about. When there is a downturn it affects the whole community. The empty shops obviously impact the vibrancy, but it is also about work, the critical local employment, those people that work in retail, in hospitality and in the service sectors. Many of them are young people, women—who of course have been hardest hit by the pandemic—people in casual work, people without penalty rates. So it is significantly important to employment and to local employment.

In addition to this bill and to the immediate relief provided for the remainder of the year and in the short term we really think that all levels of government have got now to play a really proactive role in supporting our shopping strips and doing what can be done to transform our shopping strips. I think one example that has worked really well has been the pop-up outdoor dining that has rolled out across our shopping strips. That was a welcome investment and support from the state government, which was then taken up by local governments and many traders, and that has had a really positive impact on our shopping strips in these really, really difficult times. Yes, they helped with the various social distancing requirements that were put in place, but now people are realising that this is actually a positive change for our local communities and very, very good for the urban realm. Certainly I would like to see many of those made permanent and in fact become a permanent feature of our shopping strips.

What the Greens would really like to see, though, is the creative industries being given a lead role in revitalising shopping strips. I think in particular this is relevant to the CBD as well, which, as I said, is facing those long-term structural changes where they are no longer able to rely on that steady stream of 9.00 am to 5.00 pm workers coming in, whether that is public servants, financial industries or what have you. They are no longer able to rely on that to support the various hospitality and other services and other businesses. Now they are going to need to make sure there is that steady stream of people coming into the CBD at all hours of the day to have an experience, and the creative industries certainly play a very strong role in that. We would like to see some government support for artist studios to be set up in vacant shopfronts. That would really go a long way to invigorating areas that are depressed. There are examples of where this has occurred around the world—indeed where the creative industries can actually lead an economic revival in local areas.

I think there is also an argument for supporting pop-up shops and supporting traders to get a start. One of the biggest barriers to actually people becoming a trader or setting up a business is just the proof of concept, the barriers to entry.

If that can be supported and a person can test their business or test what they are selling, and then if it becomes profitable and if it works, then they can stay on long term. But certainly I think giving those sorts of pop-ups and startups and new ideas support to actually fill those vacant shopfronts would, again, go a very, very long way. Again this is something that has been put in place in various local governments where they support with sourcing properties, negotiating rent, administrative, marketing—those sorts of things.

As I said, the pop-up dining has gone a long way, I think, to make our high streets really great public spaces. And that is something that certainly I know, even pre COVID, was a focus in my area—in Chapel Street with the Chapel Street master plan—making our shopping streets really just great places to be. And there are so many opportunities just to bring people in with great streetscapes and more greenery and really nice street furniture and what have you, expanding footpaths and really making them good places for people to come, because there is a changing nature of our shopping strips. They are not necessarily just come in, drive your car, park, buy what you want and nick off. These are places where people go for an experience. They are places for people to spend time. They will go to various shops. You know, it could range from shopping to services, to eating out. So there is a range of things that people will do, and the more time that people can spend in a certain shopping strip, the more money that they are going to spend. We would like to see some significant investment there.

One of the challenges prior to lockdown, when it was certainly exacerbated, was the fact that much of the vacancy rate was caused by the simple fact that rents were too high for the commercial tenants. Landlords were leaving them vacant because to offer a discounted or lower rent would actually then devalue their property, so you had these ridiculous circumstances where it was actually better for a landlord to leave their shopfront vacant. I am glad to have been informed that many landlords are now, because of the pandemic, coming to the party and offering reduced rents and much more flexible arrangements for their tenancy arrangements, but certainly this is something that we need to keep an eye on. We need to make sure that that is realised across all our vacant commercial properties, and so there is certainly, I think, much more that can be done at a government level to make sure that rents remain low. That could be through subsidies or making sure that landlords do not unreasonably leave their property untenanted. You could be offering subsidies, again for the creative industries or for other preferred industries that you might want to move into your shopping strip. I think that would go a really long way, again, to reinvigorating our shopping strips—you know, the heart and soul of many of our communities.

Events and festivals, I think, again are going to be really important to generate income for traders. As I said before, the CBD, I think that in particular is going to need many more events and festivals to bring people back at all parts of the day. I know the member for Melbourne has done some significant work with her local community in re-envisaging just what the CBD is going to look like in this pandemic world and post-pandemic world, when the reality is that even when we get back to so-called normal there are going to be significant changes for a place like the CBD. Inner-city Melbourne relied so much on people coming into work from 9 to 5, when the reality now is that necessarily is not going to be to the same levels as it was before. What is actually going to be put in place to bring people back? And I think that is going to be, again, the creative industries. It has got to be events. It has got to be festivals. It has got to be experiences that bring people back to communities.

I know the St Kilda Festival obviously is very successful for that particular area. For some traders the trade that they do on that particular day might be their profit margin for the entire year. I know there have been a push and moves by local traders in my area to bring back the Chapel Street Festival, and certainly that is something that I would support, a festival back at Chapel Street, so we can encourage more people to come there and really show off what Chapel Street has to the wider community.

They are just some of our ideas that we think need to happen to really bring back what has been lost and in fact, as the saying goes, build back better. I think there is now a massive opportunity. I think we are now seeing the transformative nature of what can be put in place to support our shopping strips to make sure that they are reinvigorated, to make sure that they are resilient—and, you know, a lot of them have shown a lot of resilience over the past year and a half. Just around my area you have got Toorak Road, South Yarra; you have got Hawksburn and Toorak villages and a lot of other smaller places; and you have got Prahran East, Domain and St Kilda Road. A lot of them have shown a lot of resilience, and traders have shown a lot of resilience to get through. There are many new businesses opening up, but so much more needs to be done to support them and to support our local communities.

I reiterate my call for a dedicated unit to be set up within the Department of Jobs, Precincts and Regions to support our shopping strips—one that is dedicated. When I speak to my local councils and they tell me about the works that they are looking at doing in their local shopping strips, it is with various departments; it is not a one-stop shop. If there was a unit embedded within government, it could coordinate a lot of the works for some of these unique ideas that might not necessarily sit within one particular area of government or another. If there was one unit that had dedicated oversight, had funding streams, had strategic oversight and was dedicated and focused on revitalising our shopping strips, that would probably be the best area where some of these unique, innovative ideas could probably actually then be put in place, where you have got accountability and responsibility there. So we would like to see that set up within government to really lead that and to work across all levels of government and traders as well to implement those initiatives and any other great initiatives. There are plenty of examples around the world of revitalised local areas and neighbourhoods and shopping strips.

I will leave it there. The Greens support this bill, but as I said, I think there is a lot more that needs to be done for the long term.

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Sam Hibbins MP
Member for Prahran
4 August 2021
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