Reserve to keep government wheels greased as Barr flags supports for tenants

Ian Bushnell 20 March 2020 28
Andrew Barr

Chief Minister Andrew Barr says the government will need to go bigger. Photo: Michelle Kroll, Region Media.

The Reserve Bank of Australia will ensure the ACT Government has enough money to deliver its various stimulus packages to protect the economy from the ravages of the coronavirus pandemic by taking action to support credit markets.

Chief Minister Andrew Barr said the Reserve would provide certainty through the purchase of government bonds in the secondary market, ensuring governments across Australia could continue to borrow at low-interest rates.

Mr Barr said the Reserve’s actions would mean the Government would be able to deliver the services and programs that it needed to in the short and long term, as well as help the commercial banks provide support for small businesses and people with mortgages.

“They will be buying ACT Government bonds through secondary markets which give us the certainty we’ll have the actual cash to be able to deliver the services that we need to over the coming months,” he said.

It also meant the government would be able to seek cheap loans in the marketplace over the longer term.

“We will be able to get a line of credit for the ACT Government, and the RBA will be providing funding certainty at the lowest possible interest rate for a number of years now,” he said.

“That was important for us because cash flow is going to be a problem for governments as well, and this is where the Reserve Bank steps in and does what it’s meant to do in a time of national crisis.”

Mr Barr was speaking after announcing the ACT’s first stimulus package and a National Cabinet hook-up, immediately flagging further measures as part of four-phased program.

He said the government would need to go bigger on some of the announced initiatives and extend them, and pointed to supports for both commercial and private tenants.

”This is not the last lever we will pull,” he said.

“We will be issuing further rounds of both economic rescue, recovery and ultimately stimulus at appropriate times over coming months.”

Mr Barr said there would be “quite significant” further public health driven changes that would have more economic impacts needing to be cushioned.

He later announced the ACT budget would be postponed after Prime Minister Scott Morrison said that the Federal Budget would be pushed back to October.

Mr Barr said that in the unfolding economic circumstances both commercial and private landlords would need to provide rent relief to their tenants.

“They’re going to have to give rent relief to their tenants, those conversations are taking place now at the national level with many of the large retail institutions, Westfields and the like,” he said.

“It’s going to have to extend to smaller landlords. They’ll find that if they let tenants go, if they foreclose, they will get no other tenants, and they’ll get no income, and there will be no businesses operating out of their premises.”

Mr Barr pleaded with landlords not to evict people from their homes or businesses, and urged them to offer rent-free periods if necessary to help people through this situation.

“This is about protecting what we have now, getting them through this next period, and the supports that are going to be coming into place from the ACT Government and the Federal Government ought to assist people in managing this period,” he said.

“If you’re a landlord and think you’re just going to be able to go on making the same level of profit you were before this you are going to have to think again.”

Mr Barr said there would be more announcements and interventions that no government would have previously contemplated.

“These are extraordinary times and they require extraordinary measures,” he said.

What's Your Opinion?

Please login to post your comments, or connect with
28 Responses to Reserve to keep government wheels greased as Barr flags supports for tenants
Kingsley Varr Kingsley Varr 5:11 pm 26 Mar 20

A health problem that has been made into a financial disaster, the tourist industry, the airlines and destroying lives careers. At the end of it , nobody will will be able to go anywhere and return without doing 2 weeks isolation
What we need to do is have all those who arrived in the last 3 weeks front up at the police station every 2 days for checking , for the next 3 weeks .
This will fix the onshore problem.

aaa123 aaa123 8:44 am 24 Mar 20

scomo states that (presumably in collusion with the states and territories) there will be laws that make it illegal to evict tenants for non payment, effectively granting all tenants the right to live for free in the property for as long as they choose whilst the landlord pays for everything they have been currently. If the property was earning zero income and the landlord was not trying to re let it (because they couldn’t) they couldn’t even claim a tax deduction. I can’t imagine anyone choosing to lease a property under such circumstances so effectively no one would purchase an investment property and landlords with a vacant property would leave it vacant or sell and tenants looking for a new property would be unable to find one. It would be impossible to sell a home with a non paying tenant who couldn’t be evicted as who is going to pay money for the privilige of being forced to pay for someone elses housing for free, let alone would they pay enough to cover the outstanding loan. If such laws are introduced let’s see how many landlords simply stop paying all rates, land taxes and water rates and performing repairs that the tenant wants or just stop paying the mortgage and let the bank take it back. Good luck to the bank getting enough to cover the mortgage unless the bank can evict the non paying tenant.

Janet Pumpa Janet Pumpa 8:38 pm 23 Mar 20

Mr Barr is dreaming again, lower land tax and rates, delay your stupid light rail instead of taxing the guts out of landlords who have worked all their life to better their own and their children s future. Property investment is a long term money management, Mr Barr makes it sound like landlords are rolling in cash !

Brett Barton Brett Barton 10:55 pm 22 Mar 20

Commercial rates present 30% of the rent paid by the tenant on industrial/ commercial property thanks to Barr . So Mr Barr reduce rates so landlords can help tenants more on top of landlords paying the loans on commercial property . After rates sometime does not leave a lot left to help .

Jose Vega Jose Vega 7:24 am 22 Mar 20

Barr assumes everybody will need free rent... It depends on the tenant's circumstances... Barr should reduce land tax

Lyndsay Ian Lyndsay Ian 10:49 pm 21 Mar 20

Great but unless you freeze mortgage repayments first you you will have nowhere to rent anyway because the average mum and dad investor won't be able to afford to keep it.

John Boland John Boland 5:21 pm 21 Mar 20

Barr a 'personal plea' will get you absolutely bloody no where!!! you have milked landlords dry by jacking up rates higher year on year to pay for your stupid redtrain. Landlords will mostly do the right thing under these terrible circumstances but only if you have do something on land tax and rates. On the other hand landlords could always sell the property unfortunately leaving 1 less rental on the market. play your cards carefully we are all in this together, they will help but you have to help also!!!!!!!

Mark Ryan Mark Ryan 1:52 pm 21 Mar 20

Oh like a kid in a lolly shop...more of somebody elses money I can spend. The smiling assassin treasurer says to himself.

How about he announces some harder decisions on cutting back spending in non essential areas??

Mary Richmond Mary Richmond 12:14 pm 21 Mar 20

Exactly!! Landlords aren’t the mega rich moguls they are making them out to be. They’re mums and dads and they can’t pay the mortgage without rent coming in. Often the investment property is their retirement plan so they face losing everything they’ve worked their whole lives for.

Christina Barbary Christina Barbary 11:50 am 21 Mar 20

The ACT Government charges $70 a week land tax on a modest ex govvie in Belconnen that rents for $460 a week. That's on top of $50 a week in ACT Government rates. That's a quarter of the rent to ACT Government charges, before allowing for mortgage and other costs. It's not private landlords who need to reduce their expectations of profit here.

Heidi Rosin Heidi Rosin 10:39 am 21 Mar 20

“If you’re a landlord and think you’re just going to be able to go on making the same level of profit you were before this you are going to have to think again.”

“Profit”.. ?? shows how out of touch he is with the financial circumstances of the majority of landlords in Canberra... there is NO profit!!

    Andrew Dudley Andrew Dudley 10:51 am 21 Mar 20

    Heidi Rosin then wouldn’t it be better for all the landlords to sell their extra houses?

    Heidi Rosin Heidi Rosin 10:56 am 21 Mar 20

    Andrew Dudley oh yes.. because they each have soooo many 🙄

    Andrew Dudley Andrew Dudley 10:59 am 21 Mar 20

    Heidi Rosin owning one house is very good, more than one makes you very well off in my books.

    You said landlords don’t make profit any way so what purpose does it serve to keep losing money to said property? Wouldn’t it be better to make a few hundred thousand now and be set for a very long time as well as allowing someone new into the housing market?

    Heidi Rosin Heidi Rosin 11:03 am 21 Mar 20

    Andrew Dudley a little off track.. but anyway... Great idea, make the landlords sell. Then where do the tenants live ?

    Andrew Dudley Andrew Dudley 11:10 am 21 Mar 20

    I don’t see how I went off track. You said there’s no profit to be made, I asked why not sell as a result?

    If you have more than one property and you can’t afford to maintain them and your lifestyle then you should live within your means and sell the unnecessary properties.

    As for the tenants, when a house is getting ready to be put on the market you get plenty of notice and time to make arrangements, I know this from personal experience as a tenant.

    I’ve been in that position and you just find another rental and get on with your life. Not a big deal.

    If all the landlords with unprofitable rentals in Canberra put them up for sale a lot of hopeful first time home buyers would snatch them up.

    Heidi Rosin Heidi Rosin 11:17 am 21 Mar 20

    Andrew Dudley not a big deal? Try letting a families with children, on low incomes, illness etc try telling them “it’s not big deal” to move house because their landlords can’t afford to keep the house they have made their home.

    Happy it has been so easy for you.

    My original comment was not intended to spark a debate about how rich landlords are or are not.

    Merely to express that in my opinion that Mr Barr seems to be out of touch to the realities of the current rental market.

    Andrew Dudley Andrew Dudley 11:29 am 21 Mar 20

    Heidi Rosin I’m a low income family, my partner has a rare connective tissue disorder, she is a full time student and I work as much as I can. We do not have it easy and we are not rich by any means. We’ve been forced to move with a few weeks notice multiple times from houses being sold and demolished to build better more expensive ones. You don’t have time to complain when you need to find a roof to put over your head.

    Your original comment implies you think the majority of landlords have poor financial circumstances, that hits a nerve with me because everyone I’m friends with would love to own their own home and have the luxury of complaining about how they’re other houses are no longer profitable.

    He may be out of touch with your reality, but you are definitely out of touch with mine. I wasn’t trying to debate you, I simply asked would it not be better as a landlord with multiple properties to sell one of more of them to both fill their pockets through this tough economic time and help the economy overall by providing a permanent roof over another family’s head?

    I can see you work in the realestate/property industry and thought you might have an interesting and informed answer to my question 👍 but thank you for the sarcastic “oh yes.. because they each have sooo many 🙄”

    John Dale John Dale 11:31 am 21 Mar 20

    Heidi Rosin if people aren’t making a profit on their investment - they’re ‘negatively gearing’. This is an investment choice. There is no such thing as a risk free investment (other than term deposits at .25%), and they are now encountering a risk that they maybe hadn’t foreseen, but did exist. I’m no fan of Barr, but he’s correct - everybody is going to have to re-assess and compromise to some degree.

    Heidi Rosin Heidi Rosin 11:40 am 21 Mar 20

    John Dale Hi John, not disagreeing with you at all, its it’s his flippant remarks which annoy me.

    Andrew Dudley Andrew Dudley 11:50 am 21 Mar 20

    Heidi Rosin

    How is this flippant?

    “If you’re a landlord and think you’re just going to be able to go on making the same level of profit you were before this you are going to have to think again.”

    It’s a simple fact we must all except and live with. Everyone is effected by the virus and we must all learn to accept how things will be for a while. Being annoyed at the wording of being told a simple truth will not help anyone.

    Neenie Baines Neenie Baines 11:55 am 21 Mar 20

    Heidi Rosin that’s what I was thinking..... there is no profit. It’s a long term investment for retirement.

    Heidi Rosin Heidi Rosin 11:57 am 21 Mar 20

    Andrew Dudley Its flippant because he is assuming all landlords make a profit.

    Andrew Dudley Andrew Dudley 12:00 pm 21 Mar 20

    Heidi Rosin he said the same level of profit, he didn’t say if you make profit you will no longer make any profit and he didn’t say all landlords make profit. That’s you assuming and putting words in his mouth. I don’t like a lot of politicians but you can’t assume they are saying things they aren’t.

    Andrea Kerr Andrea Kerr 2:17 pm 21 Mar 20

    Andrew Dudley the problem is most landlords don’t “own” the property it is generally mortgaged and the rent covers that and some if the other ongoing expenses. If you can manage to hold onto the property long enough for the price of it to increase well beyond what you originally paid then you may make a profit. Unfortunately this takes many many years (if at all) and every time there is a down turn in the economy then it takes longer for this gain to eventuate. It’s a huge risk for many people and often doesn’t pay off. Selling them off too soon often results in a huge loss.

    Andrew Dudley Andrew Dudley 2:34 pm 21 Mar 20

    Andrea Kerr thank you for explaining, that makes sense.

    Zac Norman Zac Norman 4:50 pm 21 Mar 20

    Shelter should not be a means to generate income. There are people who are homeless. Many people in my generation will work fulltime for their whole live and will never be able to afford a house due to negative gearing, warehousing and inflation.

    Andrew Dudley Andrew Dudley 10:11 am 22 Mar 20

    Zac Norman agreed. Housing is a human right, not an investment. Very sad to see even in a pandemic that many landlords are more concerned with their bank accounts while millions of Australians struggle to keep a roof over their head week to week.

CBR Tweets

Sign up to our newsletter

Region Group Pty Ltd

Search across the site