New Zealand First is said to have pulled support for a bill aimed at forcing landlords to negotiate rent relief with tenants hit by the impacts of Covid-19, at least in its current form.
This week Justice Minister Andrew Little was due to bring the Property Law (Leases Affected by Covid-19 Outbreak) Amendment Bill to the House.
The legislation, which would set out the type of relief qualifying businesses which had seen a "material" hit as a result of the Government's response to Covid-19 could expect from landlords, by inserting an "implied clause" into the Property Law Act.
If a deal could not be agreed, tenants would be able to force landlords into arbitration, which would be subsidised by taxpayers.
But the bill is not on the latest version of Parliament's Order Paper for Wednesday and multiple sources say NZ First has indicated it will not support the legislation in its current form.
Although negotiations between Labour and New Zealand First leadership were continuing last night - not necessarily on the issue of commercial rent relief - some MPs described the proposal agreed by a Cabinet sub-committee at the start of June as "dead".
One of NZ First's major donors, Caniwi Capital executive director Troy Bowker, claimed that the party had won a victory over Labour.
"This proposed legislation would've given windfall gains to large multi-national tenants who did not need rent relief at the expense of small, New Zealand landlords."
Bowker, who claimed NZ First had been "played" by Labour earlier this month in agreeing to Little's proposals, owns a number of commercial properties.
A spokesman for Deputy Prime Minister Winston Peters declined to comment this morning.
No one from the Labour Party has responded to requests for comment from the Herald, but this morning Stuart Nash, the MP for Napier appeared to confirm that negotiations were back underway.
Previously an agreement had been reached by a Cabinet sub committee and Peters and Little had announced a deal had been reached but Nash said the situation was being worked on, again.
"There's still more work to do on this one," Nash told Newstalk ZB's Mike Hosking this morning.
"We're working constructively. As I've said numerous times, this is a difficult piece of legislation because it goes, you know, it's looking to alter contract law, and any time you do that you've got to make sure you do it right," Nash said.
"I'll be honest, this is taking longer than I thought it would, but it's not dead in the water just yet."
The origins of the issue date back to April, while New Zealand was still under lockdown and many businesses were unable to operate.
Little announced on April 29 that the Government was looking at "options to support New Zealand businesses with rent payments as they face the economic impacts" of Covid-19.
Over weeks, Prime Minister Jacinda Ardern and Finance Minister Grant Robertson continued to promise that an agreement was coming while also suggesting that most leases included provisions which offered relief and even that in some cases landlords were more vulnerable than their tenants.
A deal was eventually thrashed out with help from Stuart Nash, who told NewstalkZB he was working in his capacity as the Minister for Small Business.
The paper Little took to a Cabinet sub-committee would have offered relief to New Zealand-based businesses with no more than 50 employees, with clarity that businesses which had an overseas head office would not qualify.
However for reasons which remain unclear , the decision which came out of the meeting was significantly different, "has 20 or fewer full-time equivalent staff per lease site".
This appeared to mean many businesses which operated across multiple sites - especially retailers - could potentially qualify.
A consultation draft of the proposed legislation which was circulated to the industry last week could have been even broader, with a review by one lawyer suggesting it could apply to virtually any lease in New Zealand because the wording meant a tenant, however large, could apply for relief if the lessor of the property (the landlord) had no more than 20 staff.
The draft legislation has not been released publicly yet.
People involved in the situation maintained that the issue was not necessarily dead but was almost certain to be the subject of a further round of negotiation.