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Some struggling businesses might still close down, despite help from the government.
Despite the new amendments to the Covid-19 (Temporary Measures) Act to provide further rental relief measures to help struggling small- and medium-sized enterprises (SMEs), Law Minister K Shanmugam said that it’s no guarantee that all businesses will survive as some might still close down, despite help from the government.
This comes as the government has not completely lifted the safe distancing regulations it imposed during the circuit breaker period, when people movement and activities of non-essential businesses were restricted, he said.
Related article: Rental Relief Guide for Commercial Tenants during COVID-19
Shanmugam’s statement was made in response to Member of Parliament (MP) for East Coast Group Representation Constituency (GRC) Jessica Tan’s query on whether the rental relief measures would unnecessarily prolong unsustainable businesses’ exit at the cost of taxpayers’ and landlords’ monies, reported TODAY.
Although it is unlikely for businesses to bounce back in the near future, given the uncertainty on how long the Covid-19 pandemic will last, he explained that it is only fair for the government to provide a lifeline — via rental relief — to SMEs.
“It is not as if we are asking (the businesses) to get on a cruise liner and everyone is going to be saved…So it will only be the very fit, viable businesses that will survive this period even with the relief we are giving,” Shanmugam, who also serves as Home Affairs Minister, was quoted by TODAY as saying in Parliament.
In fact, this is the reason the government decided to provide further support through the new Bill, he said.
The Parliament passed law amendments to the Covid-19 (Temporary Measures) Act on 5 June, which include a rental relief framework for landlords to provide up to two months of rental waivers for eligible SMEs that have suffered significant losses due to the virus outbreak.
On whether the framework’s eligibility requirement is flexible since smaller private landlords may also be financially squeezed, Shanmugam revealed that such landlords can appeal their case to a panel of assessors.
In deciding if the landlord should provide the full rental waiver to his tenants, the assessors will take into account the annual value of the landlord’s properties and whether the landlord’s rental income forms a significant part of his overall income.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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