The Queensland Government's decision not to extend moratoriums on rental evictions has been criticised by various tenant and social groups across the state.
The six-month moratorium on rental evictions halts on 29 September, despite other states extending theirs to March 2021.
Commercial tenancies in Queensland on the other hand were given a moratorium extension until the end of the year.
This is why Tenants Queensland is "concerned".
"It seems contradictory that the government is acknowledging the challenging times in their press release about commercial tenancies but not for battling residential tenants," Tenants Queensland CEO Penny Carr told Savings.com.au.
"September 29 was an arbitrary date used in April when the regulations were drafted and the challenges for many renters have not yet been resolved."
However, Real Estate Institute of Queensland CEO Antonia Mercorella told Savings.com.au returning to "rent normalcy" is a "positive sign".
“The State Government’s decision not to extend the COVID-19 Emergency Response Regulations is a positive sign of just how far we’ve come in the fight against COVID-19," she said.
"A return to rent normality is a positive sign for Queensland’s property market and in particular property investors, many who have faced extremely tough financial difficulties."
Many major banks have extended mortgage deferrals until the end of the year.
Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.
Smart Booster Home Loan
- Discount variable for 1 year <=80% LVR
- No ongoing fees
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Monthly repayments: $1,476
- Discount variable for 1 year
- No ongoing fees
- Unlimited redraw facility
Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.
Tenants Queensland, Queensland Council of Social Services (QCOSS), and Q Shelter all recommend the moratorium in the state be extended to 31 December.
“This will only serve to make the housing arrangements of Queensland families much more insecure," the groups' CEOs said in a joint statement.
“The Queensland government have decided to go it alone in not extending the moratorium – Western Australia, South Australia and Victoria have all committed to extending their moratoriums to March 2021, and Tasmania has extended theirs to December 2020.”
Ms Carr also said it could be an "anxious and grim lead up to Christmas" if renters are facing evictions.
“Many renters have been on tender hooks [sic], fearful they would not be able to keep a roof over their heads through Christmas. For some that will now be the reality," she said.
Tenants Queensland, QCOSS and Q Shelter make up three of the five groups part of the 'Minister's Housing Security Subcommittee'.
The other two are the Residential Tenancies Authority (RTA), and the Real Estate Institute of Queensland (REIQ).
At the start of the moratoriums, the REIQ was critical of the policy, saying it was skewed towards tenants, with 'mum and dad investors' being "thrown to the wolves".
Today, Ms Mercorella also said tenants can lean on increased JobKeeper and JobSeeker payments to cover rental expenses.
"Queensland still remains one of the most affordable places to rent with the current median rent only $360 for a three-bedroom home," she said.
A question over numbers
Housing Minister Mick de Brenni said the decision not to extend was because the Queensland economy is faring better than other states.
"Because of our strong health response, we've been able to keep the economy more open and we've already started delivering Queensland's plan for economic recovery," he said.
Mr de Brenni pointed towards RTA statistics that showed tenants and landlords had resolved 1,677 disputes since April, with about 70% successfully resolved in just over a week.
However, recent unemployment statistics show Queensland has one of the highest unemployment rates in the country at 7.5%, with the national rate sitting at 6.8% in seasonally adjusted terms for August.
Queensland also has a 15% youth (15 to 24 year olds) unemployment rate in original terms, the second highest in the country behind Victoria (16.2%), which is undergoing extended stage four lockdowns.
Mr de Brenni's office has been contacted for comment.
Commercial tenancy moratoriums and ‘zombie companies’
The extension of the moratorium on commercial tenancies in Queensland combines with the Federal Government’s decision to extend the insolvency moratorium on businesses until the end of the year.
The ‘safe harbour defence’ protects company directors from liability for insolvent trading, extended for debts incurred after 25 September, until 31 December.
The threshold of minimum debt applicable has been raised to $20,000, up from $2,000 for a statutory demand, and $5,000 for a bankruptcy notice.
Companies in debt can now also take up to six months instead of 21 days to respond to a bankruptcy notice.
This has given rise to the term ‘zombie company’, in which companies that would otherwise be insolvent are still trading and infecting other companies with their bite.
CreditorWatch statistics indicate that every year about 8,000 to 9,000 firms are put into administration, but figures in March, April and May showed a drop in insolvency actions.
There were 1,200 fewer court actions in April and May 2020, compared to the same period in 2019, though some of these can be attributed to a restricted court system and legal firms also experiencing their own financial difficulties.
In May, insolvency experts expressed concern that these measures ‘kick the can down the road’.
Principal of Hegarty Legal Peter Hegarty told Savings.com.au in May that the measures are well-intentioned, but could hurt creditors, who in many cases are also small businesses.
“To put this in context, a director of a struggling entity may be more inclined to see his company incur a debt with a supplier which perhaps shouldn’t be incurred because of the relaxed insolvent trading provisions,” he said.
“What follows is that the supplier entity doesn’t get paid when their invoices are due and potentially themselves are then not in a position to meet their own obligations to their suppliers and employees.
“An unfortunate outcome of this position is that it inevitably leads to a tightening of credit from those supplier entities who quite understandably need to protect their own corner. This is something which the government should be seeking to avoid.”
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.
In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may inﬂuence the cost of the loan.
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