Earlier this month the Australian parliament passed legislation aimed at getting big businesses to pay their small business suppliers on time. It is extraordinary that we have to make laws in our nation’s parliament for such courtesies, particularly in a pandemic when small businesses are struggling to survive. Nonetheless, the ‘Payments Times Reporting Scheme’ is welcomed by the small business community as a first step in greater transparency in bill paying.
From January 2021, around 3000 businesses (including foreign-owned companies and even some government enterprises) with a turnover of more than $100 million will have to publish information on a central register about their terms and practices for paying small business suppliers.
“The AICR has been in discussions with the Office of the Small Business and Family Enterprise Ombudsman on how we can support the success of the Scheme.”
It comes after much work and lobbying from the small business sector, including the Council of Small Business Organisations Australia (COSBOA) and the office of the Small Business and Family Enterprise Ombudsman (SMBFEO), Ms Kate Carnell.
In 2017 COSBOA was instrumental in getting big corporations to agree to a voluntary commitment to paying suppliers within 30 days of receiving an invoice. While a worthy endeavour, not all large corporations followed through.
This Scheme is not perfect. It does not include the 30 day rule despite the Opposition’s (unsuccessful) amendment that would give the regulator powers to fine recalcitrant big businesses. Ms Carnell says without that provision the Scheme won’t solve the problem of late payment times on its own. But, she says, “it is a step in the right direction”.
I have often mentioned our industry’s concern that this pandemic was placing intolerable strain on small businesses ability to operate as cash becomes tighter and people less inclined – or able – to pay their bills. As we have seen, this reluctance to pay bills has extended to larger businesses – who really should be doing more to assist the small business sector. Paying invoices on time is a start.
The AICR has been in discussions with the Office of the Small Business and Family Enterprise Ombudsman on how we can support the success of the Scheme. We will watch developments with much interest and make recommendations to any reviews or subsequent enquiries.
The Scheme will be administered by the Department of Industry (www.industry.gov.au).