Luke Howarth (Petrie, Liberal Party, Assistant Minister for Community Housing, Homelessness and Community Services) Share this | Hansard source

I thank all members for their contributions to the debate on the Payment Times Reporting Bill 2020 and the Payment Times Reporting (Consequential Amendments) Bill 2020. As a former small-business owner myself, I understand the need to be paid on time. There's nothing more frustrating than carrying out a service or providing a product and having to wait for your money for a long period of time when those small and family businesses have done a brilliant job and they're being held up.

Long payment times have significant and negative impacts on small businesses and produce adverse flow-on effects throughout the economy. The government has already set a new benchmark for payment times to small business suppliers. Since July 2019, government agencies are paying invoices for contracts of up to $1 million within 20 calendar days and, in addition, we have reduced government payment times to five days for small family businesses that use e-invoicing. These bills will establish increased transparency about payment times and provide a strong incentive for businesses to improve their payment performance, leading to faster and fairer payments for small businesses. Reporting on payment times and practices such as supply chain financing will allow small businesses and the public to better identify and engage with companies that pay on time.

Whilst I thank all members for their contributions, the opposition did say that this bill will not have benefits to small businesses, but we have already seen that the approach of this bill can shine a light on bad payment behaviour. Larger businesses, such as Rio Tinto and Telstra, rapidly abandoned payment practices which negatively impacted on small businesses once they were subject to public exposure. As a result of community concern, their payment policies were quickly revised to ensure suppliers were paid within 20 days. That's a great result, and we need to see that happen more and more. When big business reacts so quickly to meet community expectation, we know that they will be equally influenced by this reporting scheme.

In addition, whilst a legislated payment time may seem attractive, experience demonstrates that it will not provide the promised benefits for small businesses. In fact, if you legislate a payment time, all larger businesses may always wait until the end of that payment time instead of some of them paying early. That's important to note.

The Morrison government's approach is not about quick fixes but about delivering long-lasting benefits for small businesses and the broader economy. The Morrison government went to the Australian people with a plan to help small businesses and family businesses get paid on time, which included this payment times reporting scheme.

I should also note that the government has done a lot to help small and family businesses during this COVID-19 moment. I was speaking in my own electorate to Mike Kilgus from M J Kilgus Constructions just the other day, who employs 12 staff on his books. He understands the importance of being paid on time. He has been really, really happy with the federal government, the Morrison government's packages, in supporting him through this time as a small and family business owner. He has received a $50,000 cashback for his business via his BAS in the January to March quarter, and this has enabled him to buy $10,000 worth of tools for his employees in the last fortnight alone. Mike—Kilgus Constructions—also has five apprentices and has received half their wages back from the Morrison government in the first quarter of this time. He has also received $750 each week for each of the 12 staff via JobKeeper, so he's really happy with the support that his small and family business has received.

Let's face it: those opposite didn't have a great plan going into the last election for small and family business. The only thing they offered small businesses was more taxes. One that comes to mind was their very unfair tax on family trusts that said that a couple that split their income and that own a business are not entitled to an $18,300 tax-free threshold. That is Labor's policy still, as it stands today. I would just put out there that the Morrison government is supporting small and family businesses and we believe that this legislation will help. We call on all large businesses to make sure they continue to pay small and family businesses on time.

This legislation has been developed following extensive consultations with industry associations and representatives from small and large business since early last year. Their feedback has directly informed the design and operation of the scheme. The Payment Times Reporting Bill strikes the right balance of providing transparency for small businesses without creating an unnecessary regulatory burden for businesses both large and small. The government is acting decisively and responsibly to support small and family business and the economy as a whole to overcome the challenges posed by COVID-19. With the impact of COVID-19, it is even more important that large businesses, as stewards of their supply chains, pay small businesses promptly. These reforms highlight the government's ongoing commitment to supporting small businesses, ensuring that they continue to play a critical role in driving Australia's economic growth.

Once again, I thank all members for their engagement here today and their contributions and I commend these bills to the House.

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