Thursday, 13 February 2020
I wish to inform the chamber that Senator O'Neill will also sponsor the motion. At the request of Senators Farrell and O'Neill, I move:
That the Senate:
(a) notes that:
(i) extended payment times are an ongoing issue for small businesses around Australia,
(ii) small businesses require prompt payments to help manage cash flow and to grow, particularly when access to finance is tight,
(iii) 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,
(iv) big businesses are frequently extending payment terms to small and medium sized suppliers,
(v) big businesses are increasingly extending payment terms while also offering third party 'reverse factoring' financing arrangements to small and medium suppliers,
(vi) small and medium businesses are forced to accept fees in such arrangements in order to be paid in reasonable timeframes,
(vii) the Australian Competition and Consumer Commission is reviewing 'reverse factoring' arrangements for potential breaches of Australian Consumer Law,
(viii) the Australian Small Business and Family Enterprise Ombudsman, Ms Kate Carnell, said in the Review of payment terms, times and practices report, dated March 2019, that such arrangements "must not replace reasonable payment terms being offered, 30 days or less from invoice, and paying to those terms. It is not acceptable for large business to use small suppliers to optimise their cash flow", and
(ix) following pressure from Labor, members of the crossbench, the Ombudsman, and the media, Rio Tinto and Telstra, have committed to 20-day payment terms; and
(b) calls on the Federal Government to:
(i) release details on its register of the payment times of Australia's 3,000 largest companies,
(ii) make a commitment that big businesses that extend payment times beyond 30 days and offer 'reverse factoring' arrangements cannot use such arrangements to hide their true payment times on the register, and
(iii) clampdown on conditions that allow big businesses to treat small businesses like piggy banks.
The Morrison government is committed to helping small businesses get paid on time. The government has already introduced a number of measures to encourage faster payment times for small businesses, and we've also actively pressured the big-business community to follow suit, with a large number of big businesses already reducing payment times to 30 days or less. The government will shortly introduce the payment times reporting framework legislation into parliament, and we welcome the support from the Labor Party for this important legislation.
Question agreed to.