James McGrath (Queensland, Liberal National Party) Share this | Link to this | Hansard source

The committee is considering the Payment Times Reporting Bill 2020 and a related bill. We are dealing with government amendments (1) to (17) on sheet RS116.

Michaelia Cash (WA, Liberal Party, Minister for Employment, Skills, Small and Family Business) Share this | Link to this | Hansard source

Very briefly, in speaking to the government amendments which I moved prior to this debate recommencing, the Senate Education and Employment Legislation Employment Committee considered these bills in detail and recommended that they be passed. I thank the chamber for the support of this bill. The committee also recommended that a review of the Payment Times Reporting Scheme occur two years after its commencement. I agree with the committee's recommendation. In addition to agreeing to this measure, further government amendments to the bill have been made in response to feedback provided by various parties. The key amendments to the bill include reducing the transition period for the introduction of compliance and enforcement measures from 18 months to 12 months; moving the definition of 'small business' to the bill and inserting a new legislative note to the definition; requiring a payment time report to include additional information on payments made beyond 60 days, including payments made more than 120 days after a small business's invoice is issued; and moving more content requirements of a payment time report from the draft subordinate legislation into the main bill, including details such as the reporting entity's name, ABN and main business activity. Other technical amendments to the bill include ensuring that most reporting entities start their first reporting cycle on the scheme's commencement and requiring businesses to report in a form and manner approved by the Payment Times Reporting Regulator. I therefore commend the amendments to the Senate.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

[by video link] I move Pauline Hanson's One Nation's amendment on sheet 1026:

(1) Page 46 (before line 10), before clause 58, insert:

57B Requirements for review

(1) Without limiting section 57A, the review must consider the following:

(a) whether the operation of this Act is meeting the objects set out in section 3;

(b) whether related government policies, including policies relating to electronic invoicing, have improved the payment terms and practices of reporting entities in relation to their small business suppliers;

(c) whether other measures such as mandating one or more maximum periods (the mandated maximum payment periods ) for the payment of small business invoices by reporting entities would be more effective in improving those payment terms and practices.

(2) In considering mandated maximum payment periods, the review must consider the following:

(a) how mandated maximum payment periods could best be implemented, taking into account:

(i) potential regulatory burdens on reporting entities; and

(ii) the need to avoid unintended consequences for small businesses;

(b) the mandated maximum payment periods that would be appropriate to improve payment terms and practices, including:

(i) whether mandated maximum payment periods of 30 days, 20 days, or 10 days or less would be appropriate; and

(ii) whether mandated maximum payment periods of 5 days would be appropriate if electronic invoicing were used;

(c) the impact of sector or industry-specific differences, including how mandated maximum payment periods could be imposed on sectors and industries with differing payment terms and practices;

(d) the compliance or enforcement arrangements that would be appropriate to support mandated maximum payment periods, including whether a penalty regime should be established for the following purposes:

(i) to require a reporting entity to pay small business invoices issued to the entity within a specified period, if the entity has a median payment period for small business invoices issued to the entity that is longer than the mandated maximum payment period;

(ii) to require a reporting entity that has failed to pay a small business invoice issued to the entity within the period specified in the terms of the relevant contract to pay interest on that payment.

Michaelia Cash (WA, Liberal Party, Minister for Employment, Skills, Small and Family Business) Share this | Link to this | Hansard source

The government will be supporting the amendment moved by Senator Hanson. I thank Senator Hanson, on behalf of One Nation, for her constructive discussions in relation to this bill. As I said, the government will be supporting the amendment moved by Senator Hanson on behalf of One Nation.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

If there's one thing everybody in parliament can agree on, it's that the Jacqui Lambie Network is truly the party of small business. Sure, Liberals claim they are, and now Labor say they are the real ones. I've even heard the Greens say they're the best party for small business. You all say it publicly, but when push comes to shove you'd have to agree that the Jacqui Lambie Network is the spiritual home of small business owners and you're all just saying, for the cameras, that you are but you don't really mean it.

I'm bringing this up because no party claiming to be a party for small business would design a bill like this one. The Liberal Party can't claim to be the party of small business and maintain a straight face. Surely, you'd give it up. The Labor Party says the problem with this bill is that there is not enough to protect small businesses. Hey! At least you're turning up to the party. Welcome to the main game. But you are still moving too slowly. I can tell you that people are getting pretty sick and tired of the major parties talking big and doing nothing about the problems facing small businesses. They’ve had enough of the government talking big and doing nothing about the problems facing Australian small businesses. Once again, the government is asking the Senate to consider 'do nothing' bills that won't help fix the problems that small business owners are actually facing. It's the same thing every time with these guys: more reporting, more reviews, more talk and no action. It is time to wake up.

While we stand up here debating these bills, small business owners are going to the wall because their invoices are not getting paid on time. They can't pay their rents, their suppliers or their workers. They're getting squeezed while big businesses make money off cash that doesn't belong to them. It's not right. Sadly, those small business owners aren't going to see anything change because of this proposal from the government. All they're getting is another marketing exercise—and they're not even good at them. I'm willing to bet my very last dollar that it won't do a damn thing. The only difference this proposal makes is to force big companies to admit that they're refusing to pay their invoices on time. This should have been done years ago.

It will set up a regulator to tell the public and the parliament how many businesses are waiting for more than 30 days to pay their invoices. Whoopee! How about you make them pay it within 30 days? My goodness! I'm sorry, but what a joke! What's the point of more reporting? What's the point of more talk? We already know what the problems are. We already know how big the problem is. The fact that we need to do something now should be bleeding obvious to everyone at this point. Instead of requiring more reporting, we should be forcing those big businesses to cough up what they owe. Stop worrying about your political donations from them.

We should stop letting those wealthy corporations make billions of dollars off the backs of our small businesses and send them down the gurgler, because that's what they're doing. You should stop letting those fat cats have all the power. You should stop standing by while small businesses are being run into the ground by much bigger players. Until we do something, not just about reporting, not just about watching, those small businesses are at the mercy of big businesses, and they will continue to be at the mercy of big businesses who can simply decide to do the wrong thing. And you guys do nothing. There are no penalties. It doesn't make sense that this is the system we are working with.

No-one else in the country gets to choose to ignore their bills. When I don't pay my electricity bill on time, my energy company doesn't wag their finger at me and give me a little tap on the knuckles, does it? No. They don't just put me on a naughty list that gathers dust and has no impact. They charge me a late fee. They make me pay extra to compensate them for not getting their money on time. They try to teach me a lesson. They try to discipline me. They will send debt collectors if I push them too far, and other businesses can choose not to do business with me if it affects my credit rating. That's the way things are for the rest of us.

Ordinary people have to do the right thing and pay what they owe. Why should big businesses be any different? That's right. I keep forgetting. It's because they are giving their political donations. What do you know! If they don’t pay the money that they owe on time, they should be chased for it. They should be hounded. You should put them in a damn corner and discipline them. They should cop a fine, and a bloody big one at that. Otherwise, you are not using anything as a deterrent, except, 'Oh, hello, you are being naughty.' Jesus! Late payment should hurt them financially, not benefit them. But that's not the situation. The only reason big businesses don't pay on time is because they simply don't want to. They have no incentive to, because you're not making them. They know they can get away with pushing out payment times, because the government isn't going to force them to behave better. What's new?

They know they can ignore their bills, hold on to their money, earn interest on it and squeeze their little suppliers out there, and make them go under. And do they give a stuff? No, they don't give a stuff. Why would they?

And the government knows that you guys over on that side will turn a blind eye, just like you have done for years. This is how it is in this country. This is where we're at. That's why nearly $80 billion gets paid late to small businesses each year. That's why more than a third of small-business invoices are paid after 30 days and why late invoices take an average of 63 days to be paid. Shocking. Some of those fat cats even charge small businesses a fee if they want to get their payment in a reasonable amount of time. Isn't that absolutely bloody disgusting! That's where we're at—because you, Labor, have allowed the government to walk all over you for so long. Where is your spine for small business? Where is it?

The government's weak response to this problem doesn't reflect how deep the problem runs. A naughty list is not a punishment for those big businesses, it's the softest rap on the knuckles you can imagine—that's because, as we know, those big companies don't have any shame. They have no shame at all. They don't care about getting a bit of bad press. Why would they? They know that a bad media day will blow over. Today's news is tomorrow's fish and chips, as far as they're concerned. They know the journos will move on. The truth of the matter is that all those big businesses care about is their bottom line, nothing else—not their personnel, not their small businesses or anything else below them. They don't give a stuff. Let's be honest about that. It's in their financial interests to stuff over their suppliers, and they'll do it every single time. They won't think twice about it. And if they get caught they'll stand up, hand on heart, and say: 'Oh, we're truly story.' Jeez, give me a break. They'll go to the government, cap in hand, and they'll beg for forgiveness—which the government will give them because they're its donors. The government will roll over every time like a dog. Because that's how it works. This is how it works these days: you give us cash, and we'll leave you alone. The little guys who are trying to do the right thing will continue to get messed over and ignored. They're fighting a losing battle. I can't believe the National Party is doing it for them—oh, that's right, they get those big donations, too, from the miners and all the rest; whatever suits them. That's fine!

The little guys need the government to come out swinging and stand up for what it says about helping out small business. That's what businesses want to see. They don't want to see lip service. They actually want to see you doing something. Lip service seems to be the story of your lives these days, you Libs. Honestly, it's all lip service and no action. That could be your new motto: 'The Liberals: lip service, no action'. Small businesses need a minister to back them up, and you're not doing that. There's no way you are. You're a long way from it, because at the moment they're getting squashed under the weight of those wealthy corporations—and you know it, Minister. With everything that's going on this year, many of them won't survive, or they're not surviving now. And you're still not helping them. This government is doing nothing to stop late payments from happening. This proposal does nothing to stop late payments. Frankly, this proposal from the government is completely meaningless. It's just another line—more lip service.

Tasmanian small-business operators have had an absolute gutful. They already know that we have a problem here. It's about time the government did something about it. It's about time the government grew a spine. Tassie small-business owners need the government to back them up. They need an enforcement bill. They want to hit those big corporations where it hurts most: their bottom line. They want some payback. They want someone to stand beside them and deliver that payback so they can keep their doors open. That's why I want mandatory payment times for big businesses. I'm sick of the fact that we're letting them get away with this stuff.

Originally I wanted to force big businesses to pay up within 21 days or risk a fine. Since I've circulated my amendments, I've had conversations with the crossbench and the ALP, and I want to compromise to get this done. That's why I'll be moving an amendment to the ALP's fail-safe mechanism to make it kick within 18 months rather than three years. I'm giving big businesses a full year and a half—only because I've had to compromise, I can tell you—to get their affairs in order. And you don't think that big businesses, with all that cash, can get their affairs in order in that amount of time? You want to give them three years? I ask, what is wrong with you people? We're in a crisis. Small business can't keep their doors open, and you're not punishing big business for what they're dishing out to small businesses. What is wrong with you people? God, no wonder we're in an economic mess. You'll have more people unemployed—what is wrong with you?

The only reason they aren't doing it already is because they aren't being forced to. My amendments are an opportunity to make sure that big businesses can't get away walking over little guys any more. I won't stand back and watch this minister kick the can down the road. No-one who cares about small business should be comfortable with that. So to you in the Liberal Party over there, and to you in the Nationals: now is your opportunity to do the right thing by the small-business owners that you supposedly look out for. Support the fail-safe mechanism, and support my amendments that go along with it—because it's about time we forced big business to put their money where their mouth is. And it's the same with you, Minister: it's about time you put it up them. Start helping small business. Quite frankly, I'm calling you out today: it's not good enough for a minister.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

[by video link] I'd like to respond to what Senator Lambie just said. Small businesses have struggled with not getting payments from businesses but in terms of the legislation it has been taken into consideration that mandating a time of 30 days for businesses to pay may be a problem for the farming sector, especially now. The farming sector has contracts with the big end of town—selling their products to Coles or Woolies—and usually they do get paid within seven days, or maybe 14 days or even 21 days. But if we mandate 30 days in the legislation, you will have big business saying, 'Now I don't have to pay you until 30 days time,' and that is going to affect farmers. Different businesses have different ways of paying. The farmers may deal with companies like Elders. Farmers buy their seed, their fertiliser and what they need for farming from them. These businesses give the farmers long contracts, and that allows the farmers to get their crops in before they pay them back. If we mandate a 30-day contract, you are going to force these farmers to try and find the money to pay back these businesses.

I agree that the regime does need to be cleaned up, which is why I support the government's bill. You're going to name and shame these big businesses, which has been proven to work overseas, because people look at their payment times. There are heavy fines for businesses that don't report their payment times. That is one way to deal with it. Then it's up to the businesses themselves whether they want to do business with these other companies that are not paying. The extension times of some of these businesses are going out to 90 days or 120-plus days. This is a way of reining in those payment times. My amendment seeks to impose a two-year review period. The performance of these businesses will be reviewed, and if it hasn't worked we could then look at setting a payment time—possibly the 30 days. But we have to take into consideration the farming sector, who have advised my office that they don't want it mandated to a certain period of time. A lot of businesses have different payment times.

The government is also trying to bring in e-invoicing and encouraging more businesses to use e-invoicing and, hopefully, get their payments done within a five-day period. Proposed subsection (2)(d)(ii) in my amendment basically says that the review will look at imposing a requirement to pay interest on a payment if the reporting entity has failed to pay a small business invoice issued to the entity within the period specified in the terms of the relevant contract. So the intention is that if businesses don't pay within a specified period of time they will be paying interest to the company they owe the money to. But I believe that, under the circumstances, especially the way things are at the moment in terms of COVID-19 and how it has affected businesses, we need to have this period of time to see how this works. My amendment requires that there be a review to see whether or not it has worked and whether or not it has changed the payment times from these big businesses and companies that are actually not paying the smaller contractors. And I do say that it is very good to see that the government have now reduced their payment times and are paying under the 30 days. They've got to set the precedent for the rest of the community, and that's exactly what they have done.

I understand the frustration of Senator Lambie. I get it. We hear it all the time. I personally have been a small-business person most of my life, so I understand where you're coming from. I hear it from tradies, the people who don't get their payments, but if we go in with a sledgehammer we could end up with nothing. You've got to try and find a balance between those people who are getting their early payments and those people who are actually paying over excessive time frames.

I support the bill as amended by my amendments. If it doesn't work, we will have in place a mechanism to rein in businesses, bring in heavy fines and look at mandating payment times then. Let's get feedback from the community to see how businesses feel about it and see whether or not it is working. If it's not working, then we can come in very hard to try and address the imbalances. I believe we should give it a go, and see where we stand in two years time.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

First of all, I don't know where Senator Hanson's living. Honestly, I don't. She's out there campaigning. That's what she's doing in Queensland. She'd better go and talk to some of those small businesses, I'll tell you that now. I don't know what's going on in Queensland, but in Tasmania those small businesses want to be paid within 30 days. They are not surviving. That is the truth of the matter. There is no way the Jacqui Lambie Network will support that amendment.

Question agreed to.

by leave—I move amendments (1) to (4) on sheet 8972 together:

(1) Clause 1, page 1 (line 8), after "Reporting", insert "and Enforcement".

(2) Clause 3, page 2 (after line 23), at the end of the clause, add:

  ; and (c) to enforce the payment of small business invoices by a reporting entity within 21 days of issue.

(3) Clause 4, page 3 (after line 9), after the paragraph beginning "A reporting entity", insert:

A reporting entity must pay a small business invoice within 21 days of the issue of the invoice.

(4) Page 21 (after line 26), after Part 3, insert:

Part 3A—Enforcing payments

Division 1—Introduction

27A Simplified outline of this Part

This Part imposes an obligation on a reporting entity to pay a small business invoice within 21 days of the issue of the invoice.

A civil penalty applies to a reporting entity that fails to do so.

If a reporting entity is ordered to pay a pecuniary penalty, the Regulator must pay to the issuer of the invoice an amount equal to the penalty.

A small business supplier may request the Regulator to apply to a court for the imposition of a civil penalty under this Part.

Division 2—Payment of small business invoices

27B Reporting entities must pay small business invoices within 21 days

(1) A reporting entity must pay a small business invoice in full before the end of the period of 21 days beginning on the day the invoice was issued.

Civil penalty

(2) A reporting entity is liable to a civil penalty if:

  (a) the entity is required to pay a small business invoice; and

  (b) the entity fails to comply with the requirement in subsection (1); and

  (c) the entity is not a volunteering entity.

Civil penalty:   200 penalty units.

(3) For the purposes of subsection (2), the reference in paragraph 82(5)(a) of the Regulatory Powers Act to 5 times the pecuniary penalty specified for the civil penalty provision has effect as if it were a reference to an amount equal to the lesser of:

  (a) either:

     (i) if the invoice is paid in full before the day that the order to pay the penalty is made—5% of the total amount of the small business invoice multiplied by the number of days in the period beginning on the 22nd day after the invoice was issued and ending on the day the invoice was paid in full; or

     (ii) if the invoice is not paid in full before the day that the order to pay the penalty is made—5% of the total amount of the small business invoice multiplied by the number of days in the period beginning on the 22nd day after the invoice was issued and ending on the day the order is made; or

  (b) 0.2% of the total income for the person for the income year in which the contravention occurred.

  Note: This subsection modifies the maximum pecuniary penalty that a body corporate can be ordered to pay for a contravention of subsection (2).

(4) If an order is made for the reporting entity to pay a pecuniary penalty for the contravention of subsection (2) in relation to a particular small business invoice or particular small business invoices, the Regulator must pay an amount to the small business supplier that issued the invoice or invoices that is equal to the amount of the penalty.

(5) Amounts payable under subsection (4) are to be paid from money appropriated by the Parliament for the purposes of this section.

27C Requests for Regulator to apply to court for the imposition of a civil penalty

(1) A small business supplier may request the Regulator to apply to a court for the imposition of a civil penalty under section 27B.

(2) A request under subsection (1) must be in such form and be accompanied by such information as is required by the Regulator.

(3) Subject to subsection (4), if the Regulator is satisfied that the reporting entity has failed to comply with the requirement in subsection 27B(1), the Regulator must either:

  (a) notify the reporting entity of its obligations under this Part and its liability for a penalty (issue a warning); or

  (b) apply to a court for the imposition of a civil penalty under subsection 27B(2).

(4) If the Regulator has already issued a warning to the reporting entity on 3 separate occasions in the 3 years preceding the request, the Regulator must apply to a court for the imposition of a civil penalty under section 27B.

  Note: The Regulator may apply to a court for the imposition of a civil penalty even if the Regulator has not already issued a warning to the reporting entity on 3 separate occasions over a period of 3 years.

(5) The Regulator must notify the small business supplier of the action that the Regulator has decided to take as soon as practicable, but in any case by not longer than 4 weeks after the request is made.

Question negatived.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

by leave—I move amendments (1) to (4) on sheet 1013 together.

(1) Amendment (11), section 37A, omit "after the first 3 reporting periods".

(2) Amendment (11), section 37A, omit "after the first 6 reporting periods", substitute "after the first 3 reporting periods".

(3) Amendment (11), subsection 37B(1), omit "after the end of 3 reporting periods after the commencement of this Act and, subsequently,".

(4) Amendment (11), subsection 37B(3), omit "after the end of 6 reporting periods", substitute "after the end of 3 reporting periods".

Question negatived.

The CHAIR: The question is that amendments as moved by Senator Farrell on sheet 8986 be agreed to.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

I seek leave to withdraw amendments (1) and (2) on sheet 8973.

Leave granted.

Bills, as amended, agreed to.

Bills reported with amendments; report adopted.