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Proposed change to help struggling businesses with rent put on hold by NZ First

New Zealand First has put the brakes on proposed changes to commercial leases, forcing Labour to turn to National for support.

Winston Peters Source: Getty

The bill aimed to help businesses struggling after the Covid-19 pandemic was due to be debated in Parliament today. 

"Why use the word blocking?" NZ First leader Winston Peters said today when asked if his party stopped the proposed changes. "We’re still working on it, that’s why we’re here, to make sure we have policies that are sound and do work.

"We’re not blocking anything, we’re just making sure the policy is a sound, commercial proposition in fairness to the contractual laws in New Zealand."

It comes after initial disagreements saw negotiations stretch out across months, while business owners pleaded with the Government for assistance with rent. It also comes as Auckland's light rail development has been halted today.

"It’s not just on the light rail project, it’s a Government that is tearing itself apart," National leader Todd Muller said. "Any substantive policy piece gets announced, yet by the time it gets through to the House they’re at war with each other and can’t sing off the same song sheet."

"We’ve got a rag-tag band here who can’t agree on fundamental strategic issues."

Winston Peters hit back, accusing Mr Muller of being "very unhappy because every potential scandal or loose policy they would be able to exploit if we were not doing our job, has been taken away from them".

"I’m not blocking light rail, every programme has got to stack up, be fiscally sound and it’s got to work."

Green Party co-leader James Shaw also put the boot in, telling Stuff that he found it "ironic that a party that has been using the cover of the sanctity of contract law to protect property investors from small businesses can't even uphold its coalition agreement", in reference to NZ First and light rail. 

Justice Minister Andrew Little, who was in charge of the proposed changes to commercial leases, said there was consensus with NZ First earlier this month - "apparently this day is different". 

"They’ve raised a couple of issues, have to say they’re not new, they want to continue discussions," Mr Little said.

It was unlikely it would go to first reading tonight as planned – with its new timing dependent on the result of the discussions.

On if they were looking for National’s support, Mr Little said it would be a question for them.

"I haven’t heard back from them whether they’re prepared to support it, but they’ve got the bill."

When asked if National would support the bill, Mr Muller said at 1.45pm they had "just had the bill dropped in front of us as week speak, our criticism of it at the time was three or four months of internal fighting to essentially create some sort of bureaucratic arbitration process, we’ll have a look at it, we’ll have an assessment".

On June 4, the Government announced a proposal for a temporary change to commercial leases, adding a clause requiring a fair reduction in rent where a business has suffered a loss of revenue because of Covid-19.

Shortly after, NZ First released a statement saying the solution to the commercial rent issue was "not to alter contract law for ALL existing lease arrangements, which is what our coalition partner wanted".

Winston Peters called it "poorly targeted policy". 

"We urged our coalition partner to better define the size and problem of commercial rent disputes," Mr Peters said at the time. 

In response to that, Mr Little said the original proposal six weeks ago explicitly excluded tenants and landlords who had reached agreement on terms as a consequence of Covid-19. 

"In this respect, the leader of the NZ First party is wrong to state that the proposal would have applied to every lease agreement."

Prime Minister Jacinda Ardern said they were open that there was "some negotiation that went on" over commercial rents.

"The most important thing is that we have now an outcome that means, particularly, small businesses that find themselves in disagreement or in a difficult situation with their landlords now have the support of the Government to be able to resolve some of those disputes."

National's Paul Goldsmith told 1 NEWS at the time that small businesses were the victim of "coalition dysfunction".

Andrew Little told 1 NEWS yesterday there was "quite a few businesses who are quite looking forward to seeing some assistance in that regard, so when we get there we get there".

"Hopefully at some point we'll get it through."

Timeline

On April 1, Finance Minister Grant Robertson acknowledged rent and utilities were a big cost for small and medium-sized enterprises (SMEs), and revealed the Government was working with the sector to create a package to "deal with that".

On April 20, Mr Robertson said the Government made moves to ensure businesses could not be evicted for 30 days, so that commercial landlords and tenants would come to "constructive arrangements". 

He said the Government was putting billions of dollars into keeping businesses going, "but that hasn’t stopped us from looking at what more might be possible". 

On April 28, when asked about commercial rent issues, Ms Ardern said that if some commercial landlords do not come to an arrangement with tenants, they "may end up in a position where you may find yourself with a vacant property [in a] time it will be very, very difficult to lease". 

The Government announced on April 29 it was considering commercial rent relief changes. 

Ms Ardern said on May 29 the Government intended to address issues around commercial rents "very, very soon".