Covid 19: News 6.04.2020
Commercial Lease during COVID 19: Your Rights and Options as a Landlord – By Bret Gower, Smith & Partners Lawyers
The most pressing issue for commercial landlords and tenants is the question of paying rent during the lockdown period when their business premises cannot be accessed. The key point to start with is your individual lease – as leases are not all standard, and the provisions for this situation vary. Experienced commercial lawyer, Bret Gower outlines the rights and obligations of a commercial landlord in his article here.
Queues at West Auckland Liquor Stores set to Ease Following New Restrictions
Queues at West Auckland liquor stores are set to ease as the result of new restrictions on the sale of spirits through the outlets.
From Monday, The Trusts retail stores will no longer sell spirits and premixed (RTDs) – reducing the need for out of area consumers to travel across town to purchase alcohol. The policy will last while the country remains at COVID-19 alert Level 4.
The proactive move will see the product mix aligned with supermarkets and other retailers open during the current lockdown which sell only beer, wine and cider, and comes following consultation between The Trusts and NZ Police.
The new regulations were put in place after the retailer’s analysis of purchase data in some of their stores showed the sale of spirits as a proportion of total alcohol revenue had lifted significantly since the lockdown began and the collection of customer addresses revealed up to a quarter of them lived outside of West Auckland.
Matt Williams CEO of The Trusts says their first priority is the safety of the general public and staff.
“While there was a negligible change to our customer profiles in some of our stores, we were greatly concerned to find there is sufficient anecdotal evidence to suggest that a number of people are travelling from other parts of town to purchase from us.
“We don’t believe this is in keeping with the Government’s mandate to restrict the movement of people and the spread of COVID-19 and, as a result, we have modified our product mix – reducing the incentive for Aucklanders to leave their area.
“We regret the inconvenience this may cause to our West Auckland community who have supported us throughout the lockdown, however we know they will understand that as a community-minded organisation health and safety must take precedence,” he says.
Williams says the store’s trading hours will remain the same for the time being but are continuous review in response to the level of customer demand. Similarly, the sale of spirits policy will be reviewed when the country moves to alert Level 3.
The retail purchase of spirits and RTDs will still be possible through a number of online retailers around the country.
Covid 19: News 3.04.2020
New Zealand went to COVID-19 Alert Level 4 on 11:59pm, Wednesday 25 March, at which point all non-essential businesses had to close, and people were required to begin a period of self-isolation in their homes.
We will be at Alert Level 4 for four weeks, at least, so for now, this enforced period of inactivity is the new normal. We know it’s been a hell of a time for businesses. We’ve been swamped with enquiries and calls for help and guidance.
Our message right now is this: stay steady and pause your restructures and redundancies if you can. Retain your team at home and pay them using the government wage subsidy.
If you need to make changes to employment conditions to help you get through or you need to look at redundancies in the future, we’re here to assist you.
So let’s look at the issues and implications for employers (and employees) during COVID-19 Alert Level 4.
The National Cyber Security Centre (NCSC)
Covid 19: News 2.04.2020
Tony’s view COVID-19
By Tony Alexander – independent economic commentary
To help Kiwis make better decisions for their businesses, investments, home purchases, and people by writing about the economy in an easy to understand manner.
Housing Negatives and Positives
This Supplement is devoted entirely to housing. I’m going to attempt to produce as long a list as possible of the factors which will be impinging on our housing markets over the coming months and longer term as a result of the Covid-19 outbreak. There are sure to be other factors which I miss or which have yet to become apparent, and, in the absence of any experience at all of how our economy behaves during a pandemic, it is impossible to make strong statements about the relative strength of the various factors.
All we can each do is try and get our own personal feel for how things will go based on an individual balancing of the positive and the negative factors. And perhaps upon the basis of what one feels, reasoned decisions can be made regarding how to manage one’s existing property investments and what to do with regard to new purchases over the remainder of this year.
And one final comment, this downturn is unique and it is bad. But many of us have lived through some rough periods in the past, including the late-1970s and early-1980s when there were deepening restrictions on what we could do, bad government policies, near bankruptcy for the country, and the resulting need for massive changes – Rogernomics. We all learnt to adapt to those different turbulent environments which ran almost two decades from 1974-92, including the 60% sharemarket fall of 1987-88. We are not facing anything remotely approaching that lengthy epoch in New Zealand’s history.
Absence of income means inability to raise a deposit, get a mortgage, and perhaps even continue to keep the house one already owns. This is the most difficult factor to place a magnitude on.
Loss of job security
Even people in work will feel reluctant to purchase large items like cars, couches, and houses for fear of losing work and being unable to service the debt. Some may sell to go renting.
200,000 Temporary Working Visa Foreigners Not Needed
In recent years NZ has become dependent upon foreign labour. Most of these people are in low skill jobs, many in tourism and hospitality. Most will leave in the coming year. This is good for Kiwi employment. But it means housing is no longer needed for these people.
To improve their ability to service debt some people will seek to trade down to a less expensive property.
Perhaps pleased with family experiences during lockdown some people may choose to shift one partner from full-time work to part-time or quit work altogether, in order to have more time with children. This transition may entail shifting to a less expensive house, and maybe to the regions.
Temporary Net Migration Stalling
Over the past year we saw a net migration inflow to New Zealand of 45,000 people, or about 3,800 a month and 865 a week. For the rest of this year it seems valid to assume no foreigners will be able to
shift here. However, almost no Kiwis are going to leave, and those coming in on flights are more likely to be Kiwi tourists returning home than people permanently shifting back. A reduced net migration inflow this coming year is likely – how much we cannot know.
Loss of Retirement Wealth
Some retired people have seen their investment portfolios lose value. To improve their cash flow position some may downsize their house. Some may seek a reverse mortgage.
Inner-city apartment rents and prices will fall in the absence of many foreign students this year, perhaps most missing next year, and fewer on a long-term basis.
The complete absence of tourism this year and the much lower numbers of inbound travellers for years to come will bring Airbnb dwellings back to the market for long-term rental and home ownership purposes. This is good news for the worsening availability of housing around New Zealand.
Non-Bank Lenders Downsizing
New lenders, especially out of Australia, have been expanding their activities in New Zealand over the past year. Now they are pulling back. Reduced availability of finance will affect some potential buyers.
While lending on houses is a low risk activity for a bank, they will pull back from the market slightly. This won’t be so much because of risk and funding (as discussed below for developers), but staffing resources. Banks will be concentrating on servicing existing clients through to the other side. They won’t have time or resources for new customers to any great degree until next year perhaps.
KiwiSaver Funds Down
Some young people who were going to use their KiwiSaver funds for a deposit were unwisely in an aggressive or balanced fund when they should have been in a conservative fund. These people will have to delay their purchase for perhaps 6 – 12 months.
Government Bias Toward Tenants
The rents freeze and no evictions for rent non-payment period extension from 14 to 60 days are understandable developments given the current circumstances. But this reminder to landlords that they have a social responsibility to their tenants will be a surprise to those who have kept themselves distant from their income source. Some will sell, encouraged also by this year’s introduction of ring-fencing and planned extension of no-cause termination periods.
Rents Will Fall
Reduced employment, visa holders leaving, students not arriving, suggest investor calculations based upon rising rent assumptions will need to be redone. This will discourage some investors whilst leaving purchasing space for the professionals and those with a long-term focus.
Pullback from Regions
Over the past four years investors have switched their focus from Auckland out to the regions. We’ve seen this before; it often does not end well with over-supplies revealed in some locations. It is likely that newly risk-averse investors will now switch back to a main centre focus, just as people seeking work will gravitate to the main centres.
Few Aspirational Purchases
When the small to medium-sized business sector does well, owners buy holiday homes, homes in wealthier suburbs, homes in elite school zones, homes on the coast. Such buying will be weak for the next 1-2 years.
Come December and January there is likely to be a baby boom as people engage in relations whilst in lockdown. This will necessitate some upgrading of house size for some families.
Low Interest Rates
Mortgage rates were at record lows heading into this recession, they have gone lower, and they probably will not go up to any noticeable degree for three years. This matters tremendously with regard to cash flow pressures forcing people to sell and is a key difference between the conditions which led to average house price falls during the GFC, Asian Crisis, and 1987 crash, versus now. Investors will feel encouraged to quit bank deposits and seek property yield.
Higher Long-Term Net Migration
By taking action early in our pandemic cycle, we stand a good chance of becoming virus-free whilst woe continues elsewhere. We know that events such as this which turn people’s worlds upside down can have profound impacts on long-term lifestyle choices. There is a strong possibility that many of the one million Kiwis offshore plus their partners and children will choose to live back here. More foreigners are likely to seek to become Kiwi residents also. These two factors may see a further structural rise in our annual net migration inflows which have averaged 29,000 p.a. over the past ten years.
Working from Home
Many more people will be doing this after lockdown than before, on a permanent basis. The extra time spent at home may lead some to shift further from the city centre for more space, some to the regions for more affordability, some to upgrade their house for more space and outdoor access.
After being confined in an apartment for 4-8 weeks, some people may want to swap for a house.
Less Outbound Travel
Just as fewer people long-term will visit here, so too will fewer of us holiday overseas. At the moment our offshore travel has been costing $10bn per annum. Much of that in the future will be available to spend locally, perhaps on local holidays, and perhaps on a better house or even a holiday home down the track.
Young People Saving
Much attention has been made to reduced deposits for those young people who were going to use their KiwiSaver funds but who were in the wrong type of fund. But now they are realising how quickly a deposit can be built without spending $100 a week on coffee, more than that on drinking, eating out, new clothes and fancies. Given their small KiwiSaver balances, these affected young people (assuming they keep their jobs) will be back to their planned deposit size within a few months if they keep their non-spending habits up.
No new houses are being worked on for 1-2 months. This means slower supply growth
Banks are going to pull back aggressively from funding new property developments over at least the coming year for the following reasons. First the riskiness of new developments has increased as pre-sales are likely to be harder to get, and even the heightened risk of deposit forfeiture may mean some projects not started yet will not start, while others which have started will stop. Second, much as the Reserve Bank may be willing to supply whatever funding and liquidity banks need, real funding from the private sector is what matters for long-term bank sustainability and that is in shortish supply. Third, bank resources are going to be devoted to servicing existing clients for at least all this year. Banks may not have sufficient staff to assess the risk of new business to the safe degree which they would like.
Absence of a Pre-Recession Debt Binge
Household debt rose just 40% in the past five years versus 80% in the five years leading into the GFC, and 115% leading into the 1997/98 Asian Crisis. The presence of LVRs will have also kept the riskiness of mortgage lending down.
We Know This Recession is Temporary
We know some sectors have essentially gone, and the downturn this Autumn – Winter will be deep. But we can reasonably believe a vaccine will appear at worst 16 months from now if the scientists are correct. Before then we are likely to be virus-free. We know from China’s example that rigidly-enforced lockdowns do work. The city of Wuhan is slowly opening up again after two months of lockdown.
The Support Measures are Huge
There is simply nothing else in history which compares with the fiscal and monetary guns being brought to bear on the spiralling weakness which would otherwise play out in very bad degrees from Covid-19.
Anyone under stress can put their principal and/or interest payments on hold for up to six months. After that many will find their debt is still too burdensome and politely forced sales are likely to rise. But the spiral which might otherwise have developed is being avoided.
As most of the 200,000 people here on temporary work visas leave in the coming year or so, and jobs will have to be offered to Kiwis and not automatically rolled over into new visa holders, employment will improve for Kiwis.
There is friction in labour markets, which means it can take some time for people laid off in one industry or location to find work elsewhere. There will be some training required, but eventually the shortages of labour in many sectors will attract Kiwis and help soak up some of the unemployed.
Preference for Property
Just as Baby Boomers avoided shares following the 1987 crash and decimation of their wealth, so too will a new generation perhaps look more favourably at property as a long-term investment than they did before. Then again, the index fall back then was 60% versus only about 24% this time around. And this time there’s no debt funding of shares, or share clubs.
We entered this turbulent period with shortages of property in our main centres – but probably over-supplies in many regions, especially now. This main centre shortage means not just a physical shortage of property, but a shortage of listings also, Given the low interest rates and mortgage holiday it is extremely unlikely that listings will massively surge when our economy opens up again.
Covid 19: News 29.03.2020
Mayor Goff establishes Mayoral Business Advisory Panel
Mayor Phil Goff today announced the formation of a Mayoral Business Advisory Panel (COVID) to help work through the issues created by the COVID-19 lockdown and to assist the city’s transition back to normal economic activity when the lockdown is lifted.
“The Mayoral Business Advisory Panel brings together a range of leaders in the business and public sectors to ensure we are working together to address the challenges faced by Auckland businesses and workers during the lockdown period,” said Mayor Goff.
“I have spoken to the Prime Minister and she has appointed Hon Carmel Sepuloni as the liaison between myself and COVID Cabinet Committee to allow for feedback from this Advisory Panel directly into central government.
“The Advisory Panel allows for regular communication between Auckland Council, key government sectors and the business community, even during the lockdown period. It will identify issues needing to be addressed and opportunities to get through the difficulties caused by the unprecedented interruption in economic activity.
“Auckland is 38% of the country’s GDP and we have never had to shut the city down like this. These are extraordinary times and it is important that local government keeps engaged with our business community.
“The Business Advisory Panel is another mechanism of keeping abreast of what is going on in the city in addition to our other already established networks like local business associations, the IMSB and community and NGO organisations,” Mayor Goff said.
The Advisory Panel will act as a conduit for messages to be relayed to government and for responses back to the business community.
Deputy Mayor Bill Cashmore said, “The initial membership of the Advisory Panel is a group of people who are well connected in Auckland from a range of industries that are most affected by the lockdown. Most of them wear several different hats but the aim has been to ensure we are looking at this issue from as many angels as possible.
“The Business Advisory panel is another method by which Auckland Council can achieve a deeper understanding of the serious challenges that are before businesses in our city and country areas. We need to fully understand these challenges and also the opportunities to get our business economies and employment moving again once we emerge from lock down.”
The Mayoral Business Advisory Panel (COVID) is comprised of:
- Ailsa Claire – CEO, Auckland District Health Board
- Peter Reidy – CEO, Fletcher Construction
- Mark Goldsmith – Regional Commissioner, Ministry of Social Development
- Brett O’Reilly – CEO, EMA
- Rachel Brown – CEO, Sustainable Business Network
- Derek McCormack – Vice-Chancellor, AUT
- Robert Reid – President, FIRST Union
- Grant Webster – CEO, Tourism Holdings Limited
Changes to the panel membership may be made over time.
In these turbulent times there will be a number of pressing issues you and your business will be facing. We surveyed our customers to understand their immediate needs and challenges and 4 themes emerged.
The Icehouse has support for businesses, please cheak out the links below.
Covid 19: News 27.03.2020
Regrettably in tougher economic times criminals and thieves are like rodents, they scramble for any morsel of food that is left unattended!
On the 25th March at 3.00 pm George Walkers Auctions at 353 Rosebank Road were the target of a daylight robbery by three hooded criminals, they were bravely fought off by the girls (no good men around when there wanted rings a bell) and nothing was stolen, and if by the grace of god their escape vehicle crashed in Rosebank Road and the three villains were arrested.
Lucky GIRLS (this time) and so this morning in conjunction with our Patrol supplier Active Security Services (who are resident in Rosebank Road) we are introducing a special daylight patrol service for our members at the special rate of $15.00+GST per call. This visit will take the form of a complete onsite check referred to as a Bed Down and it is suggested by Active Security that this occurs twice daily.
We are mindful that Security is like going to the dentist, it is seen as a grudge purchase but by this implementation our Security networks with this type of patrolling contact can only expand and the RBA are keen to see this offer being adopted, Please send me an email to email@example.com or text or call Mike Gibson 0272940551 and we will arrange immediately.
Covid 19: News 26.03.2020
What are essential businesses?
• Accommodation services for essential workers and people who need to be isolated/quarantined
• Customs New Zealand, Immigration New Zealand and the Ministry for Primary Industries
Building and construction:
• Building and construction related to essential services, critical infrastructure, or immediately needed to maintain human health and safety at home/work
Courts, tribunals and the justice system:
• Courts of New Zealand and tribunals
• Critical Crown entities (eg Electoral Commission)
Fast-moving consumer goods:
• Businesses involved in the supply, delivery, distribution and sale of food, beverages and other key consumer goods (but not take-away shops)
• Schools and educational facilities (e.g. early childhood centres)
• Banks, insurers and other financial institutions
• Hospitals, primary care clinics, pharmacies, medical laboratories, care facilities
• Ambulance services
• Mortuary services
Local and national government:
• Any entity involved in Covid-19 response or that has Civil Defence/emergency management functions
• Key public services
Primary industries, including food and beverage production and processing:
• Packaging, production and processing of food and beverage products
• Food safety and verification, inspection or associated laboratory services, food safety and biosecurity functions
• Veterinary and animal health/welfare services
Public safety and national security:
• Emergency services
• Security and intelligence services
• Justice system
• Public safety and national security roles
• Any entity (including research organisations) involved in Covid-19 response, hazard monitoring, resilience, diagnostics for essential services
• Welfare and social services, including NGOs, which meet immediate needs (further guidance will be provided)
Transport and logistics:
• Transport services
• New Zealand Post and courier services
• Any small passenger service vehicle driver – including taxis and ride-share services
Utilities and communications, including supply chains:
• Electricity, gas, water, waste, fuel, telecommunication services, internet providers and media
Covid 19: News 23.03.2020
Start your action note page on a blank piece of paper (in other words what happened yesterday has gone and it’s what you do tomorrow that’s really important).
This is what we decided on Monday 16th March. Postponement of all RBA Events until the 31st of May 2020 at the earliest. We will then review for the next 3 months of June, July and August.
We will not be employing any new staff.
We have reallocated internal roles around what we perceive will be required for at least the next 3 months
We are thoroughly recommending you read the Spark Business Hub proposal about staff working from home (yes! they’re in Rosebank at 559 Rosebank Road, and ask for the special Data offer available. Call 0800 824 924
Less focus on new members and more focus on providing real pastoral care to our targeted rate and local businesses. We want to be your hot line.
If you’re confused about any 14 day stand down or other employee obligations call MyHR on 0800 694 764. Another local Rosebank business at your doorstep at Unit C, 485 Rosebank Road, and only a call away.
Let your Debtors become your best friends, visit and develop a person to person relationship with the traditional slower payers because if you don’t, the other bloke will!
Understand fully what your relationship is with your bank i.e. What is your overdraft limit if you increase it suddenly? It will happen to some so make sure your banker is your friend.
Don’t be frivolous with Patrol costs, Monitoring and other aspects. Thieves suffer too in times of hardship, they take more risks and become more adventurous. Remembering the RBA has their own Rosebank Security Company in Rosebank Security Services, with considerably lower overheads we discount our services to our members, call us on 09 820 0551 or Mike Gibson 0272 940 551.
I and our staff are committed to helping all Rosebank Businesses in any way we possibly can; employment related matters, new staff, contract staff, part time staff, EMA based advice line contacts. Also a great place for updates at this time https://covid19.govt.nz/
We are your Business Organization.
Cheers and best wishes
Mike Gibson, RBA Chief Executive