COVID-19 – The National Cabinet – The Emperor’s New Clothes (23 April 2020)


The concept of the “national cabinet” appears to have conceptually gained the media’s unquestioning acceptance and is almost consistently referred to as some arm of Government or Parliament.

That approach similarly means that we are also almost consistently lead to believe that the “national cabinet’s” “pronouncements” are binding on the people of Australia as, or akin to, laws.

I today read a news article reporting that “stakeholders” in a particular industry had demanded that the “national cabinet” make a decision to provide it with support.

Given the meaning of “decision”, that report supports the idea that there is a general belief, fostered by the media that the “national cabinet” has decision making power.

A good example of that effect is the response to what is called the: Mandatory Code of Conduct for Commercial Tenancies (Code).

Hands up (figuratively) who thought the Code was, national, mandatory or the law?

Hands up (figuratively) who relied on it?

You are not alone.

I was almost tricked into those illusions by reading some of the material lawyers published in their apparent rush to appear relevant by commenting on the Code as if it was law.

But instead I recognised it as a series of smoke and mirrors carefully orchestrated by various press releases and various Government announcements to give that appearance, particularly because, I know something about the law and how Codes of Conduct obtain the force of law. For example, the “Franchising Code of Conduct” the “Oil Code” and the other codes that form part of the Competition and Consumer Act 2010 (Cth) (ACL).

I was, however, intrigued by one of the concepts underpinning the Code; the concept that landlords should bear a particular brunt of “Australia’s response to COVID-19” including the need to establish entire new processes of review despite them having not contributed to the onset of COVID-19.

Why would it not be easier for the various Governments in Australia, as part of their various economic stimulus packages, to pay or guarantee the payment of rents using a system of administration most easily adopted by the various governmental departments that are designed to do just that; administer Government decisions and (our) money?

But, enough of that postulation, back to the central thesis, what is the “national cabinet” considered against the example of the Code.

COAG and the National Cabinet

On 13 March 2020 the Council of Australian Governments (COAG)[1] met and agreed:

  • a COVID-19 National Partnership Agreement (NPA)[2] to respond to the impacts of COVID-19. The focus of the NPA is the response to COVID-19 by health systems in Australia and the required funding arrangements. The NPA is a non-binding agreement; and
  • to set up a national cabinet to deal with the national response to Coronavirus (National Cabinet). [3]

In relation to the economic consideration caused by COVID-19, the COAG meeting summary states that: “All Australian governments will play their part in delivering complementary, targeted and proportionate responses to the economic impacts of coronavirus[4].

In the Prime Minister’s Media Statement transcript on 13 March 2020, the Prime Minister states that: [5]

  • “communique for COAG has been agreed and that’s been circulated. We’ve dealt with a number of important issues today. Obviously the most significant of those was the briefings we took earlier today on the issue of the national response to the coronavirus, considering both the significant health issues that are associated with that response, as well as the economic issues…”; and
  • the National Cabinet will: “deal with issues such as schools and universities and all of these types of things that prisons which we even discussed today, practical issues about the management of the national response to the coronavirus. Each and every state and territory that is represented here is completely sovereign and autonomous in the decisions that they make. But what we’ve agreed to do together is to work together and be unified and to be as consistent and coordinated as possible in our national response. That means from time to time sharing resources, it means if there is a need to assist each other with various needs, then this group will work closely together to achieve that end.”

The National Cabinet met on 3 April 2020.

In the Prime Minister’s Media Statement, he referred to:[6]

  • an industry code for commercial tenancies, which had been worked on by stakeholders representing both landlords and tenants; and
  • that industry code being made a mandatory code, incorporated into state and territory legislation, where appropriate.

On 7 April 2020 the National Cabinet met again to discuss the “mandatory industry code” referred to in the 3 April 2020 Media Statement and the principles set out in that Media Statement. The Prime Minister stated with respect to commercial tenancies: “that a mandatory code will be legislated and regulated as is appropriate in each state and territory jurisdiction.”[7]

The Code was published on 7 April 2020.[8]

Commonwealth Government’s Powers requiring implementation of the Code

The Commonwealth Parliament has specified legislative powers to make laws for the peace, order, and good government of the Commonwealth and they do not include a power to regulate land laws and leasing (neither commercial nor residential).

The Commonwealth Parliament also has powers to make laws where States refer matters, within the State’s powers, to the Commonwealth Parliament and/or the State afterwards adopt the Commonwealth Parliament’s law.[9]

The Parliament of Western Australia has the power to make laws for the peace, order, and good Government of the colony of Western Australia[10] which are not within the Commonwealth Parliament’s powers or where the State has referred powers to the Commonwealth.

How the Code “will” be implemented in Western Australia?

The Prime Minister’s Media Statements set out above make it clear that the States and Territories are “meant” to implement the Code through legislation and regulation in each State and Territory.

The Commonwealth Government will not regulate the implementation and enforcement of the Code apparently because: “it is not possible for a collective industry position” because “all premises are different as are their commercial arrangements.”[11]Or, perhaps more accurately, it does not have the legislative power to do so.

The Code does not explain what is meant by the “collective industry position”. However, it is reasonable to conclude based on the reference to the ACL in the Code, that the reference to taking a “collective industry position” is similar to the position under the ACL in relation to the Franchising Code of Conduct.

Many people expected that the Code would be implemented in Western Australia by the Commercial Tenancies (COVID-19 Response) Bill 2020 (Bill). The Legislative Council agreed to the terms of the Bill, as the Legislative Assembly put forward on 16 April 2020, with some minor amendments, on 20 April 2020.[12]

However, the Parliament of Western Australia did not follow the script. It did not follow the apparently mandatory Code.

And, interestingly it did not link the restrictions placed on landlords to any proof of that any need of a tenant the subject of the Bill and now law be caused by the emergence of COVID-19 or the Government’s response to it.

However, Parliament indicated that it intends to put in place by Regulation a code of conduct relating to other matters affecting commercial landlords and tenants; will that be the rise of the Code or the completion of its rejection by the State Parliament and an oblique recognition of the Emperor’s new clothes? We need to wait and see.

National Cabinet – Conclusion

The National Cabinet is either a sub-committee of COAG or a collective formed on an informal basis without any statutory foundation and with no apparent controls on its decision making. It is not part of any elected Government nor part of any arm of an elected Government; for example, a Ministry.

Perhaps it is an advisory body to Government?

But whatever it is, it has no power to decide or make any binding policy or law despite its apparent appearance of being clothed with such things.

The Code – Conclusion

The Code:

  • is not a mandatory code the Commonwealth Government decided and must, therefore, be implemented, but instead was apparently prepared in conjunction with “industry stakeholders” and “agreed” (as a concept) by the committee known as “the National Cabinet”;
  • does not require States and Territories to refer or give up any of their respective State Powers to the Commonwealth Government;
  • requires legislative implementation and regulation by each State and Territory (if an as they each choose);
  • is not intended to amend existing land and leasing laws, such as the Commercial Tenancies (Retail Shops) Agreement Act 1985 (WA) (but would do so in its effect);
  • if given effect, will require a tenant to be eligible for the Commonwealth Government’s “Job Keeper Scheme” (which proposition has currently been rejected in Western Australia); and
  • includes principles that are tenant favoured and, therefore, largely ignores landlords with high costs, expenses and overheads.

At Kott Gunning we have been interested in the effect of COVID-19 and keenly learnt the changes to the law in response to it with open, enquiring minds.

We know the law and will consider and be prepared to advise you about the effect of the almost certain upcoming regulations implementing a “commercial tenancies code” which will almost certainly not be the “mandatory Code” advanced by the National Cabinet.

We take our obligations to our clients seriously and are here to understand your needs and assist you to apply the law to ensure that you are both compliant with it, but that you also maximise your commercial response and return including whether as a landlord or tenant.

We are your commercial legal partners.

Please contact us with your personal enquiry, we can help.

The information published in this paper is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.

John Park – Partner – jpark@kottgunn.com.au

Kellie Woods – Special Counsel – kwoods@kottgunn.com.au

COAG is made up of the Prime Minister, Premiers from each State and Territory and the President of the Australian Local Government Association. See: https://www.coag.gov.au/about-coag

[2] Which can be found here: https://www.coag.gov.au/sites/default/files/communique/covid19-npa.pdf

[3] The National Cabinet is made up of the Prime Minister and the Premiers from each State and Territory. The National Cabinet

[4] See https://www.coag.gov.au/sites/default/files/communique/communique-13-march2020.pdf

[5] See: https://www.pm.gov.au/media/press-conference-premiers-and-chief-ministers-parramatta-nsw

[6] See https://www.pm.gov.au/media/press-conference-australian-parliament-house-act-030420

[7] See https://www.pm.gov.au/media/press-conference-australian-parliament-house-6

See https://www.pm.gov.au/sites/default/files/files/national-cabinet-mandatory-code-ofconduct-sme-commercial-leasing-principles.pdf

[9] Section 51(xxxvii) of The Constitution (Cth).

[10] Section 2 Constitution Act 1889 (WA).

[11] The Code states that: “All premises are different, as are their commercial arrangements; it is therefore not possible to form a collective industry position. All parties recognise the intended application, legal constraints and spirit of the Competition and Consumer Act 2010.” It does not state what that “spirit is”?

[12]https://www.parliament.wa.gov.au/Parliament/Bills.nsf/ED7097E743C7BC2D4825854C00102B97/$File/LC%2B119%2B%282020%29.pdf