Thursday, 13 February 2020
Mr Deputy Speaker O'Brien, I'd like to congratulate you on your elevation to Deputy Speaker of the House. Almost a year and a half ago the Prime Minister promised to create a register of the payment times of Australia's 3,000 largest companies. A transparency register would require big businesses to publish how they engage with small business when it comes to payment terms. The government also promised they would require big business to have a payment time to small business of 20 days in order to get government contracts. Nearly 18 months later, we are still yet to see anything materialise from that commitment by the Prime Minister. More importantly, the small businesses of Australia shouldn't expect to see anything soon.
According to internal documents, as reported by the media, implementation is likely to take place in late 2021—the end of next year. That is three years, at the earliest, from the announcement of the implementation by the Prime Minister. So the question that is begged is: why is this government dragging its heels to implement this fairly straightforward, uncontroversial policy? It is time for this government to stop talking and start helping small businesses. When small businesses say that say cash flow is crucial to them and that small business is the backbone of this nation, why is this not a matter of urgency for this government? Why do they continue to ignore calls from small business to start looking out for them?
Small businesses across the country are being squeezed by larger firms who seek to extend payment times. In meetings I have held with small businesses across Australia, one issue keeps coming up: cash flow. In order to maintain cash flow, these smaller businesses are encouraged to take up reverse factoring or, a more appropriate term, payday loan arrangements in order to get paid under the same terms they previously enjoyed. Fortunately, light is being shone on this insidious practice, and some of our larger companies, namely Telstra and Rio Tinto, have reversed their positions on this. I welcome the decisions of larger companies not to go down that path. That will improve payment times for small businesses.
Recently the small business ombudsman, Kate Carnell, signalled that, unless other big businesses followed, she would recommend there be legislation to compel big business to do the right thing, and I agree with the small business ombudsman. According to the ombudsman, late payments by large businesses to small businesses account for 53 per cent of all invoices—more than one in two invoices are late to businesses that really require those payments to be made on time. Fifty-three per cent equates to $115 billion paid late to small businesses—the equivalent of $7 billion of working capital to Australian small businesses, each and every year. So we say to the government: 'It is now time for you to do something in relation to this commitment that you made. You can't keep making commitments and then dragging your feet, delaying this important, vital reform that hundreds of thousands of businesses rely upon.'
We are also very concerned that Minister Cash has not come out at all—not once publicly—to criticise the inappropriate behaviour of larger businesses that apply or subvert reverse factoring to the detriment of small businesses. We would have thought that a government and a minister for small business would be defending them—being their champion—in ensuring that payments that should be made to them are made to them on time and not instead making them get a loan in order to pay the bills so they can receive what they're owed on time through a loan practice. That is not the way in which this should operate.
The government has talked big but has delivered nothing when it comes to payment to small business. These are payments that need to be made to ensure that small businesses continue—that not only their businesses survive but their businesses thrive so that they can employ more Australians. We know that there are millions of Australians—over 4½ million Australians—that are employed by small businesses across this country. Each and every one of us has thousands of small businesses in our electorates. They deserve to be treated properly, and they expect their Prime Minister, who made a commitment 18 months ago, to deliver on that commitment and not to wait, as it would appear, another 18 months for that to happen.