Audio version 4 mins
Who Gets Sacrificed For The Public Good?
Looking a year into the future, Australia is likely to emerge from Covid 19 to entire cities with their street life permanently shuttered. The wheels are in motion right now.
We spent the last week telling our sixty full-time staff that our work is now literally illegal and our income will be zero for six months. Our industry, events, was first to be sacrificed for the public good. Bars, restaurants and gyms followed us on Monday. The majority are small-medium family businesses, and we’re largely doomed.
Yet the grim reality is that closing down is the right thing to do. In the good times we provide social fabric, and now everyone needs the opposite for a while. It raises hard questions about who pays for Australia’s tough medicine. At the moment it’s just a few of us picking up the tab, and we’re not rich enough to survive.
Our own business is trying to keep the majority of our staff on with reduced hours, while most in our industry made instant sweeping redundancies. We’re scratching through every tiny cost, trying to keep the business alive.
Landlords Are In A Virus-Free Universe
Meanwhile commercial landlords are operating in a different universe where there is no Covid 19. Their position is: sorry but we have a contract and our returns must not be affected in any way. A few of our landlords have agreed to push a percentage of our rent back to later in the year, but it still has to be paid back. Not a penny less.
So if we survive, we’ll pay double rent as we emerge into what will be a deep recession. Like so many of the current stimulus tactics, like deferred tax payments or interest-free loans, it’s just kicking the can down the road.
Why should landlords be a protected species while actual risk takers go to the wall? Most landlords don’t employ anyone. Their contribution to society is frankly quite marginal.
If your business is forced to stop trading for the obvious good of society, why should your landlord have total immunity?
Zero Rent For Covid-Closed Businesses
If the government is looking for an effective way to save businesses and lessen the economic disaster, why not legislate to ban rents for Covid-closed businesses? If landlords make nothing for six months, they’re well ahead of businesses like ours, which are making massive losses.
If they have loans, they can take it up with the bank like everyone else with a suddenly-unsupportable mortgage. But most of them don’t have loans. Of the 20 or so commercial landlords I’ve dealt with over the course of our business, almost all are people who bought the building in the eighties for about what the monthly rent is now.
Sure this idea sounds quite communist coming from a capitalist business owner, but landlords can afford it and their failure to pitch in to help solve this health crisis is unacceptable. It’s time government forced their hand.
Sorry to be ‘share if you agree’ guy, but if you’re a business in the same position, call or write to your local representative about this. It needs action real soon or it’s game over for so many businesses.
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How about a landlord now increasing rent by 48%!!! I guess to drive a gym out of business, so they can reclaim the lease and then rent to someone else or open their own gym when the crisis is over!
Are you kidding that is insane
These are unprecedented times and devastating for many Self employed and small business owners who can no longer trade. That said, i’m not sure that demonizing commercial landlords is the way to go. You say that ‘their contribution to society is frankly quite marginal’ – interesting. If it wasn’t for commercial landlords, how could business owners who need premises but can’t afford crazy real estate prices afford to open their shops?
You also seen to scorn them for not being ‘actual risk takers’ yet risk and reward go together. If you have a sensational quarter and make double your normal profit, do you pay double rent? I doubt it. My dad has no super (was self employed his whole life) and his pension for him and his 88 year old wife is the rent from one small shop that he used to operate his business from. I have massive sympathy for business owners affected by this shutdown, but I don’t think it’s helpful to try and paint landlords as the bad guys. They have an investment and they have a contract. It sounds a bit entitled to talk with pride about being a risk taker, yet cry foul when the risk doesn’t pay off. This is a tough time for many, I hope we can be kind to each other throughout and not look for scapegoats. Just my 2c. I hope you can reach agreements to help protect your employees and return your businesses to good health.