Andrew Wallace (Fisher, Liberal Party) Share this | Hansard source

I rise to speak on the Payment Times Reporting Bill 2020 and the Payment Times Reporting (Consequential Amendments) Bill 2020. Just last week the Treasurer announced that, as a result of the devastating bushfires, followed soon after by the COVID-19 pandemic, Australia had ended its historic 29-year economic run, and that, regrettably, we are now in a recession. He also warned us that although our GDP only fell 0.3 per cent for the March quarter, there will be more difficult days ahead. Whilst this is of course disappointing news, it's worth comparing Australia's drop in GDP of 0.3 per cent with those of other nations. The average fall across OECD countries was indeed six times that of Australia's.

Let's look at the specifics of some of those other countries: Japan had a fall of just under one per cent; South Korea and the US—just over one per cent; the UK, Canada and Germany—a little over two per cent decline in their GDPs; France and Italy—a little over five per cent each; and China saw an almost 10 per cent decline in their GDP over the March quarter. In a new economic report issued by the OECD today, Australia is forecast to have the third-best recovery of member nations, behind only South Korea and Turkey.

Whilst Australia falling into recession is indeed bad news, when we look at what has happened around the world, just as in our own health situation, things could have been so much worse. But, as the Treasurer has said, economically and health wise we are not out of the woods yet, and it is likely that things are going to get tougher before they get better.

Many Australians under the age of 50 will not have worked through a recession before. Unlike my parents' generation, and theirs before them, those under 50 have not worked in a recession. They have not survived world wars or the Great Depression. I can vividly recall working as an apprentice carpenter during Paul Keating's 'recession that we had to have'.

Mr Drum interjecting—

The member for Nicholls agrees with me on that. He would have been swinging a hammer at the same time I was!

I recall listening to my old boss speaking to us over smoko and lunchtime about how difficult things were going to get, particularly in the building industry. I remember him saying that, in times such as those, cash was king. Well, Peter Mahoney, you were right back then, just as you would be right if you said it now—and I'm sure you are saying it now. Cash flow is indeed king. Without cash flow a business is on life support, if not dead.

I first learned the importance of cash flow from my old boss Peter Mahoney and from when I went on and had my own building business. Later, as a construction law barrister, I represented countless subcontractors who were chasing payment from builders. In my 16 years as a construction lawyer and adjudicator, I saw literally hundreds of cases where subcontractors' and suppliers' payments were being withheld by builders, principals and developers. Sometimes there was a legitimate dispute. There may have been an argument for the lawful withholding of some moneys for rectification costs, for example, or where the parties had agreed on liquidated damages claims, but there were many, many instances where payments were unreasonably, and sometimes capriciously, withheld. Sometimes these payments were withheld because the larger business was simply insolvent.

In 2012, I was appointed by the Queensland government to undertake a review of the security of payment laws in Queensland. That review led to legislative reforms which made the state's building payment system more robust and equitable. Regrettably it has since been amended again, changing many of those reforms that were instigated as a result of my review.

The building industry is a very good example of how important cash flow is to small businesses. I read the Sunshine Coast Daily, and not a day goes by when I don't see an article about a builder going broke. There are many, many builders going broke on the Sunshine Coast and, unfortunately, when they go broke they take subcontractors and suppliers with them. Mick de Brenni is the housing minister in Queensland. This Labor government in Queensland has been in power for five years. When Mick de Brenni became the housing minister around four years ago, he promised the building industry that, with the reforms he would bring in, every subcontractor would be paid in full, on time, every time. That promise has never been satisfied. Mick de Brenni, you should hang your head in shame for making that promise in the first place and, having made that foolish promise, never being able to deliver it.

I have had a long interest in ensuring that businesses—in particular, small businesses—are paid promptly and that larger businesses do not treat them as an unofficial bank, using the small businesses' money to keep the large businesses afloat without the payment of interest. In fact, as part of that review, I can recall speaking with a large builder on the issue of retentions. I had a robust discussion with this builder, who honestly believed the retentions he was withholding from his subcontractors were his money. He earnestly and honestly held the belief that the money he was withholding in retentions from his subcontractors was his money. Such is the cancer, the misinformation and the miscommunication, particularly in the building industry—

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