Thursday, 3 September 2020
Payment Times Reporting Bill 2020, Payment Times Reporting (Consequential Amendments) Bill 2020; Second Reading
I'd like to align myself with the comments in the contribution that Senator Sheldon has just made. I rise too to speak on the Payment Times Reporting Bill 2020 and the Payment Times Reporting (Consequential Amendments) Bill 2020. I want to say at the outset that without amendments to this bill, and specifically the payment times reporting scheme, this bill should not be supported.
The Payment Times Reporting Bill introduces a new payment times reporting scheme which requires approximately 3,000 large businesses and government enterprises with annual turnover of $100 million and above to publicly report biannually on their payment terms and practices for their small business suppliers. It's an important piece of legislation if we are to get Australia moving again. After all, businesses, and in particular small businesses, are the backbone of Australia's economy. Labor understands that the policy to ensure these small businesses are supported is important work of government. There is no more important time than right now as we are emerging out of the health pandemic and the economic recession that we have found ourselves in.
Small businesses in Tasmania are the backbone of our state's economy. There are over 40,000 businesses in our community, and 95 per cent of those small businesses employ, on average, between one and 19 employees. These businesses are made up of local people; they deserve our support, because we are a close-knit community that supports one another. As we emerge from this crisis, it is crucial we support local small businesses in our cities, suburbs and regions. It would be really good if the Department of Finance, for instance, ensured that electorate office accounts were paid in a more timely manner, because many of those are local small businesses.
The objective of the scheme outlined in the bill is to improve payment outcomes for small businesses by creating transparency around payment practices of large business entities. The government argues that, by providing access to information on large business payment performance, small businesses will be able to make more-informed decisions about potential customers. The government argues that greater transparency on payment practices and performance will also create pressure for culture change to improve payment times. The opposition agrees.
The government-chaired Senate Standing Committee on Education and Employment handed down its report on 30 July, and it recommended passage of the bill with the additional recommendation of a statutory review after two years. The report included additional comments by Labor senators, drawing attention to the majority of witness testimonies to the Senate committee arguing that the bill will not have a tangible effect on reducing payment times from large businesses to small businesses. As stated earlier, this bill should not be simply waved through without amendments that change the Payment Times Reporting Scheme. As noted by Labor senators, the Payment Times Reporting Scheme is in reality a transparency initiative to support self-regulation.
The efficiency of self-regulatory regimes is usually poor to questionable unless backed by the genuine threat of heavy-handed regulation. In principle, the transparency regime should be given a limited time to demonstrate its efficiency. Labor senators are of the belief that complementary back-up measures are necessary to ensure that the Payment Times Reporting Scheme improves general payment times to small businesses. The committee's evidence was consistent. Most witnesses argued for mandated 30-day payment times, or clarification that the object of the bill was to achieve payment times of 30 days or less. These witnesses were not any old witnesses. They were witnesses that those opposite should be listening to. You don't reform without consultation with a sector or with the Australian people. That is when policy fails. That is something this government just doesn't understand, because they don't like to hear an argument that they don’t agree with. These stakeholders included the Australian Small Business and Family Enterprise Ombudsman, the Australian Trucking Association, the Australian Institute of Public Accountants, Self-Employed Australia, and Chartered Accountants Australia and New Zealand. These are informed witnesses. They deal with these practices every day.
We know the world over that self-regulation does not work, and certainly business is not going to start self-regulating during a global pandemic, when budgets are weakening, investment is low, business confidence is low and wages are stagnating—they were before the pandemic. Many people are in insecure work, and that has only increased due to the pandemic and the government's policies. Labor supports accountability and transparency measures. Without them, we cannot support these bills. So we are urging the government, the crossbench and the Nationals. The Nationals come into this chamber, day in and day out, talking about regional Australia. They should be standing with us and supporting our amendments. That is what is in the interests of small businesses around the country, but particularly those in regional areas of this country and in my home state of Tasmania.
The payment times fail-safe mechanism, by introducing the following features, is intended to provide an incentive for reporting entities to collectively improve their payment practices or run the risk of more stringent regulation. The regulator is required to report to the minister, after each reporting period after the first three reporting periods, on the median and average times taken by all reporting entities to pay small businesses' invoices. The reports are to be tabled in both houses of parliament. The payment times fail-safe mechanism is triggered if, after the first six reporting periods, the median time, reported by all reporting entities, to pay small-business invoices for a reporting period is more than 30 days. The regulator must report these factors to the minister.
We've talked in this chamber, over the past two weeks that we've been here, about the true impact of the pandemic both from a health point of view and from an economic point of view. We've seen the recent figures which, unfortunately, see us plummeting into recession. The last 29 years of growth in this country have now been set aside for the worst recession I've seen in my lifetime, and a lot of that rests with the government and the decisions that they've been making. Firstly, they should support our amendments. Secondly, they should ensure that government agencies are using best practice by ensuring that they pay their accounts within that 30-day period. Many of them, as I've outlined before, are with small business as well as with larger businesses.
If we are to work together, we will see better practices throughout the country. The first instance of this is those opposite, the government, supporting our amendments, if they truly want to make this bill work more effectively and see transparency. If they won't support them then we call on the Nationals to do the right thing. It was interesting to hear Senator Sheldon, in his contribution, refer to former senator 'Wacka' Williams. He was a straight shooter. He knew what was needed in the regions in his home state and around the country. So I'm calling on Nationals senators to get with the program and support our amendments.