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Keep up to date with the Office of the Small Business Commissioner News and other information relating to small business.
State Government needs to compensate small businesses affected by Gel Blaster ban
The Small Business Commissioner John Chapman has called on the State Government to compensate small businesses which have been virtually shut down overnight by changes to laws regarding gel blasters.
“It is simply not right that SA Police can use what I regard as coercive force with seemingly little regard to the livelihoods of those concerned,” Mr Chapman said.
“The Government needs to have a genuine review of this process and if they are determined to continue with the current changes, then they should compensate both businesses and arguably the purchasers of these items.”
“I would anticipate very few owners of gel blasters will apply for a firearms licence at a cost of $101 plus a $40 firearm registration fee plus the owner will have to undertake a TAFE course and ensure their gel blaster is locked up in a Category one gun safe.”
Mr Chapman said there had been a precedent for compensation with changes to the firearms laws in 1996.
“At the time, the Federal Government which was responsible for the changes put in place a compensation scheme in conjunction with the States due to the significant changes to firearm laws.”
“At a time when many small businesses are struggling and some failing due to the impact of the COVID-19 pandemic, the last thing we need are deliberate government actions which financially disadvantage small businesses,” Mr Chapman said.
“Governments have a responsibility to do no harm and that must always include small
Mr Chapman said he would be pursuing the matter through the Police Minister Hon. Vincent Tarzia MP.
Legislation for retail and commercial leases affected by COVID-19 has been extended
The South Australian Government has successfully moved to extend legislation to protect retail and commercial tenants from eviction over the failure to pay rent due to the COVID-19 pandemic.
Legislation has been passed by State Parliament on 24th September 2020 to extend the COVID-19 Emergency Response Act 2020 (Act). This will extend the Act until 6th February 2021.
The current The COVID-19 Emergency Response (Commercial Leases No 2) Regulations 2020 (Regulations) have been amended. The Regulations (under which mediation can occur) now extend to 3rd January 2021. The Act and Regulations provide the opportunity for tenants and their landlords to mediate through the Office of the Small Business Commissioner if necessary.
A link to the amended Act can be found here.
A link to the updated regulations can be found here.
A link to a video overview of the Act and Regulations from Small Business Commissioner, John Chapman, can be found here.
A copy of the media release from the Treasurer, Hon Rob Lucas MLC, can be found here.
By way of background, on Tuesday 12th May 2020, the SA Government announced that changes would be made to the Covid-19 Act in relation to matters involving commercial leases.
Under the COVID Act, the Government has significant powers to make regulations, if necessary, for the purposes of mitigating the adverse impacts on a party to, or any other person with an interest in, a commercial lease resulting from the COVID-19 pandemic.
The COVID-19 Emergency Response (Commercial Leases No 2) Regulations 2020 impose an obligation on parties to commercial leases to negotiate in good faith.
The specific wording of the Regulations Part 2 (6) provides:
The parties to a commercial lease and any guarantor or other person with an interest in the lease must make a genuine attempt to negotiate in good faith the rent payable under, and other terms of, the commercial lease during the prescribed period, having regard to -
(a) the economic impacts of the COVID-19 pandemic on the parties to the lease; and
(b) the provisions of the Act and these regulations; and
(c) the provisions of the National Cabinet Mandatory Code of Conduct—SME Commercial Leasing Principles During COVID-19 published on 7 April 2020.
A copy of the National Cabinet Mandatory Code of Conduct—SME Commercial Leasing Principles During COVID-19 published on 7 April 2020 can be found here.
The Regulations include prohibitions and restrictions relating to commercial leases and in particular that:
If a lessee is an affected lessee, a lessor cannot take any prescribed action against the lessee on grounds of a breach of a lease during the prescribed period consisting of:
- a failure to pay rent; or ·
- a failure to pay outgoings; or ·
- the business operating under the lease not being open for business during the hours specified in the lease.
A lessee is an affected lessee if –
(a) the lessee is suffering financial hardship as a result of the COVID-19 pandemic; and
(b) the following turnover in a relevant year was less than $50 million:
(i) if the lessee is a franchisee—the turnover of the business conducted at the premises the subject of the commercial lease;
(ii) if the lessee is a corporation that is a member of a group—the turnover of the group;
(iii) in any other case—the turnover of the business conducted by the lessee at the premises the subject of the commercial lease.
Prescribed action means taking action under the provisions of a commercial lease or seeking orders or issuing proceedings in a court for any of the following:
- eviction of the lessee from premises that is subject to a commercial lease;
- exercising right of re-entry to premises that is subject to a commercial lease;
- recovery of land;
- distraint of goods;
- requiring a payment of an interest on unpaid rent otherwise payable by a lessee;
- recovery of the whole or part of a security bond under the commercial lease;
- performance of obligations by the lessee or any other person pursuant to a guarantee under the commercial lease;
- termination of the commercial lease;
- any other remedy available to a lessor against a lessee at common law or under South Australian law.
Applicable Prescribed period is defined as:
Period 1 - 30th March 2020 to September 2020
Period 2 - 1st October 2020 to 3 January 2021
Unless otherwise agreed between the lessor and lessee, rent must not be increased during the prescribed period if the lessee is an affected lessee. Rent determined by turnover is excluded from this provision in the Regulations.
A lessor must not require an affected lessee to pay land tax or reimburse land tax if the lessee is suffering financial hardship as a result of the COVID-19 pandemic.
It Is important to note that leases entered into after 30 March 2020 are outside the Regulations, except for renewals or options to renew or extend an existing lease on the same or substantially similar terms.
The Regulations also provide for the situation that if the parties have agreed a variation or modification to the operation of the lease between 30 March 2020 and 15 May 2020, the Magistrates Court cannot make an order to vary the agreement during that period of time, but they can change the agreement going forward.
Negotiation and agreement is encouraged
As a first step, lessees and lessors are encouraged to commence discussions on any matters relating to leases including deferral and/or waiting of rent, rent free periods or any other modifications to leases which will help both parties through this difficult time.
The Small Business Commissioner has produced a guidance note for parties to a lease in relation to the provision of financial information to assist in negotiations. Download the Covid-19 Guidance Note - Commercial Information "requests" by Commercial Lessors Factsheet here.
If agreement is reached, that agreement and any changes to the lease should be documented and executed by all parties.
If signing is not possible, parties should consider exchanging agreements electronically.
To assist lessees and lessors who are negotiating an agreement on rental relief, the Office of the Small Business Commissioner has prepared a draft Deed of Arrangement to record any agreement reached. The draft can be found here.
Parties are strongly advised to obtain their own independent expert advice – be that financial and/or legal - BEFORE committing to any changes in their lease arrangements.
What if you can’t agree - the Office of the Small Business Commissioner (OSBC) may be able to help
If parties to a commercial lease are unable to resolve their dispute, a lessor or an affected lessee may lodge a request for mediation on the Office of the Small Business Commissioner (OSBC) website here.
An OSBC officer will contact the parties and, if appropriate, arrange for mediation. The Small Business Commissioner will allocate a mediator from his panel for this purpose.
There will be no cost to the parties for mediation. It is expected that parties will negotiate in good faith.
The mediation may be conducted in person, by video conference or teleconference or a mix thereof and parties should ensure they have access to a computer/mobile device for the mediation, if necessary.
Parties will be required to execute a mediation agreement prior to the mediation commencing and ultimately, if the mediation is successful, a legally binding settlement agreement will be made by the parties.
If the mediation process:
- fails to achieve agreement or is unlikely to resolve the dispute; or
- mediation would not be reasonable in the circumstances; or
- a party refuses to participate or did not participate in good faith.
The Small Business Commissioner will issue a Mediation Certificate to both parties which is required BEFORE any action to resolve the matter can be commenced in the Magistrates Court.
For information on residential tenancies, contact Consumer and Business Services
State Government needs to show compassion on Small Business Grants
The Small Business Commissioner, John Chapman, has called on the State Government to urgently review its policies to get South Australian businesses up and running.
“As we are emerging from the shut downs caused by the Covid-19 pandemic, I am finding there are many businesses which are struggling to get back on their feet financially,’ Mr Chapman said.
The Commissioner said an important first step was for a review of the policies around the State Government’s $10,000 Emergency Cash Grants for Small Businesses.
Applications for the grant which was part of the Government’s response to the Covid-19 pandemic closed on 1st June 2020.
However, according to the Small Business Commissioner there have been a number of applications which have been rejected because they were not completed by the closing date.
“The State Government needs to show some compassion and flexibility in this area given I have a number of cases where accountants and business owners were overwhelmed with issues and were unable to complete the application and provide the supporting paperwork within time,” Mr Chapman said.
“It is grossly unfair that those businesses which would have qualified for these desperately needed funds are now having the door slammed in their face by the Treasurer.”
The Small Business Commissioner has made written representations on behalf of 15 businesses to the Treasurer.
Mr Chapman said the State Government also needed to reconsider its decision not to provide financial support to sole traders and those businesses who do not have employees.
“These businesses and their owners have and are facing enormous difficulties, yet we have a Government which does not seem to understand the pressures they are under.”
Mr Chapman said he was concerned that some businesses, particularly those in the tourism sector, were denied the grants because they did not employ staff.
“We have genuine businesses, many small family operations, which meet all the criteria except for that of being an employer,” Mr Chapman said.
“These businesses are often the next generation of small business employers and many need to be assisted through this dreadful time.”
“The Government cannot ignore these small business people who put their hearts and souls into their enterprise and Government at the time of great need.”
Changes to the Retail and Commercial Leases Act 1995
Landlords and tenants in the retail and commercial leasing industry need to be aware of important changes to the Retail and Commercial Leases Act 1995 (the Act) and accompanying Regulations.
These changes came into force on 1 July 2020. A summary of these changes can be found here.
A copy of the amending Bill as passed by both houses can be found here.
From 1 July 2020, at the time when a copy of a proposed lease is provided to a prospective tenant, the landlord or person acting on behalf of the landlord must also provide the prospective lessee with a copy of the Small Business Commissioner’s information brochure, which is referred to as the Retail & Commercial Leasing Guide. Failure to comply with this requirement may result in a penalty of up to $8,000.
A copy of the information brochure which is effective from 1 July 2020, can be found here.
For further information please contact the Office of the Small Business Commissioner via our Contact Form.
COVID-19 IMPACTS ON SMALL BUSINESS
Every business is being affected by Covid-19/Coronavirus with impacts on customers, staff and supply chains.
Major changes are being put in place to support small businesses in rental premises, please refer to updates on our website www.sasbc.sa.gov.au for information.
Businesses facing particular issues or disputes in terms of their banks, their rental premises, suppliers or other business parties, are encouraged to contact our office on firstname.lastname@example.org
One of our staff will contact you as soon as possible to discuss your issue.
Our office specialises in alternative dispute resolution and we will endeavour to work with the parties to find a resolution.
If you have a dispute please lodge online here.
We are working online to maintain our support to small businesses during the Covid19 pandemic.
Please see our Youtube videos for our recent webinar events which provide information on how to manage your business through this difficult period.
The Australian Taxation Office (ATO) is ready to assist small businesses with taxation concerns, visit their website Dealing with disasters.
In relation to staffing and industrial relations matters please refer to your business or industry association which include Business SA, Australian Industry Group, Master Builders Association, Housing Industry Association, Australian Hotels Association, Restaurant and Caterers Association, Motor Trade Association Primary Producers SA who should be able to assist.
Alternatively the Fair Work Ombudsman has a help line to deal with pay and industrial relations matters on 13 13 94 or their website www.fairwork.gov.au.
For further information on financial assistance, eligibility and timing for the Commonwealth Government’s support for businesses visit the business.sa.gov.au website.
For workplace wellbeing, please visit our information page here.
The South Australian Government passed the COVID-19 Emergency Response Act 2020 (the COVID Act) on 8 April 2020 and accompanying Regulations have been effected on 16 April 2020.
The Act and Regulations makes various temporary modifications of the law of the State in response to the COVID-19 pandemic including stopping evictions.
Latest updates provided by Department for Innovation and Skills
FRIDAY 9 OCTOBER 2020
Federal Budget 2020-21: What's in it for business?
On Tuesday night, the Australian Government released the 2020-21 Federal Budget outlining several initiatives of interest to South Australia's business community.
We've provided a summary of these announcements below. For more detailed information, please visit budget.gov.au.
New employee wage subsidies
The Australian Government has introduced a new $4 billion JobMaker Hiring Credit, which will provide businesses with an incentive to take on additional employees aged between 16 and 35 years old.
Around 450,000 positions are expected to be supported through this initiative, which provides employers with $100 - $200 per week, per each eligible employee, for up to 12 months.
The wages of up to 100,000 new apprentices and trainees will also be partially subsidised through the Australian Government's $1.2 billion Boosting Apprenticeship Commencements wage subsidy.
Eligible employers and Group Training Organisations will receive up to 50 per cent of an apprentice or trainee's wages subsidised, at a maximum of $7000 per quarter, per new apprentice or trainee.
The subsidy is available for wages paid from 5 October to 30 September 2021, and will run concurrently with the existing Supporting Apprentices and Trainees wage subsidy. It is available to all eligible South Australian employers, regardless of business size or industry.
For more information, view the Frequently Asked Questions prepared by the Department of Education, Skills and Employment.
For further information about skills and training, visit skills.sa.gov.au.
Significant tax breaks for individuals and businesses
In addition to tax relief for over 11 million individual Australians, the Budget outlines several tax measures to support Australian businesses.
Companies with turnover up to $5 billion can, up to June 2022, offset tax losses against previous profits and tax paid in or after 2018-19. This will help companies that were profitable and tax paying but now find themselves in a loss position due to the COVID-19 pandemic.
The instant asset write-off scheme, originally introduced as a temporary COVID-19 support measure, has also been expanded. Businesses with a turnover of less than $5 billion are now able to deduct the full cost of capital assets purchased until June 2022.
The Australian Government has also committed $2 billion to expand the Research and Development Tax Incentive, providing more generous support for businesses that invest in research and development (R&D).
Boost for science, research and innovation
Under the Australian Government's JobMaker plan, $1.5 billion has been committed to the Modern Manufacturing Strategy. Most of this funding will be distributed through the Modern Manufacturing Initiative (MMI); supporting projects that help manufacturers scale up and create jobs.
Priority sectors include minerals and resources, food and beverage, medical, recycling and clean energy, defence and space products.
The Budget also contains an additional $1 billion for research and additional student places in Australia’s university sector in 2020-21.
Several initiatives supporting more women into STEM roles have been outlined, including $25.1 million to support women through industry cadetships and advanced apprenticeships.
An additional $35.9 million will expand the Boosting Female Founders initiative, providing female entrepreneurs access to expert mentoring and business advice.
Investing in our infrastructure
The Federal Budget includes $625 million for South Australian transport projects, a significant boost to the state's existing $12.9 billion infrastructure spend.
To complement the existing HomeBuilder program in supporting residential construction jobs, the Australian Government will also extend the First Home Loan Deposit Scheme. 10,000 additional buyers will be able to access low-deposit loans in 2020-21.
Support for Australia's screen sector
The Budget commits $53.2 million for Australia's screen sector, including funding to support the creation of Australian drama, documentary and children's content.
This national support complements a suite of state initiatives, including the 10% Post Production, Digital and Visual Effects (PDV Rebate) and Screen Location Incentive accelerating film and production work in South Australia.