The Council of Small Business Organisations Australia (COSBOA) welcomes the Federal Government’s acceptance of all recommendations made by the Emerson Review of the Payment Times Reporting Act but stresses future measures will be required to support small businesses.
COSBOA CEO Luke Achterstraat said many of the measures were practical and would support small businesses including simplifying and streamlining reporting requirements and processes.
Mr Achterstraat said in a tough operating environment, timely payment of small businesses was critical not just for the survival of Australia’s 2.5 million small businesses but also their own suppliers and employees.
“Every time a small business is not paid on time there is a blow to productivity, efficiency and time spent by the owner to chase payment. This hurts the small business itself but also has a flow on effect to their contractors, suppliers and undermines business investment and growth.
“There is also increasing evidence that late payments impact the mental health of small business owners.”
Mr Achterstraat said the government must lead by example in providing more government tenders to small business and paying them on time.
“We welcome efforts that ensure payment times are considered in the development of relevant government policies, including unfair trading practices reforms, eInvoicing and procurement.”
Mr Achterstraat acknowledged that the Emerson Review did not recommend introducing a compulsory maximum time for small business payment, despite this being urged by several stakeholders including the Queensland Small Business Commissioner.
“The government made an election commitment to ensure small businesses are paid on time and to ensure a mechanism for payment within 30 days. Further work will be required to fulfil this commitment and there is a clear role for the Australian Small Business and Family Enterprise Ombudsman to support better outcomes.
“We need to maintain a collaborative approach to continuously improve payment times, including promoting that 7- and 14-day payment times are desirable, not just 30 days.”
According to data from the Payment Times Register, only three out of ten big businesses pay their small business customers within 30 days, while nearly one-quarter take more than 120 days to pay up.
Mr Achterstraat said that government may need to consider a further examination of compulsory maximum payment times in the future.
“Just as the government has identified wage theft as a priority issue, non-payment and late payment of small businesses and contractors must receive ongoing focus.
“As the government looks to tighten tax collection from small business and increase the frequency of superannuation payments, it is critical that policy levers that promote cash flow to small businesses are continuously monitored and improved.”
For more information about COSBOA, visit: www.cosboa.org.au
For media enquiries or interviews, please contact COSBOA on ceo@cosboa.org.au or call (+61) 433 644 097
Luke Achterstraat
Chief Executive Officer