Rt Hon Winston Peters, Leader of New Zealand First
New Zealand First acknowledges that some small businesses have been struggling to meet fixed costs due to the loss of revenue by COVID-19.
We also know some businesses are at greater risk of insolvency when they cannot come to a reasonable agreement about a temporary change to their lease.
However, the solution to this problem is not to alter Contract Law for ALL existing lease arrangements, which is what our coalition partner wanted.
This would’ve been poorly targeted policy and affected many landlords who’ve sensibly adapted to the changed circumstances brought by COVID-19.
Leader of New Zealand First, Rt Hon Winston Peters said, “using a sledgehammer to smash a nut is not commonsense. We must remember the sanctity of contracts is a crucial dimension to Settled Law.
“NZ First is also cognisant the SME Loan Scheme, a Coalition policy that’s been hugely successful. It was intended to provide relief for a business’ fixed costs, such as rent.
“We believe that as a Government we need to show New Zealanders we’re aware of the fiscal costs of every policy decision reached – therefore we’ve insisted on better targeting. This is why we urged our Coalition partner to better define the size and problem of commercial rent disputes,” said Mr Peters.
NZ First is now satisfied this has been achieved by a temporary amendment to the Property Law Act with the following criteria:
- Limiting eligibility to SME’s with 20 or fewer equivalent full time staff,
- that the business is New Zealand based, and,
- that the business has not already come to an agreement for a rent abatement with their landlord.
Mr Peters said, “We’re pleased that clear rules must now be followed for eligible SME’s when determining what factors must be considered for commercial rent disputes.
“The criteria is based on principles that landlord and tenant interests are both taken into account so that the financial burden of COVID-19 is fairly proportioned.
“We also agreed that any disputes under the implied Clause are to be settled by arbitration, and that the Government will subsidise streamlined arbitrations at a rate of $6,000 per arbitration,” said Mr Peters.