With more than 2 million small businesses across Australia, cash flow is critical.
At present, there are no payment terms legislated, requiring businesses to pay within strict timelines. This causes immense financial pressure on small and medium sized businesses who employ the bulk of Australians.
In a 2017 Inquiry into Payment Times and Practices, the Australian Small Business and Family Enterprise Ombudsman received more than 3000 submissions from small business across Australia.
The inquiry clearly identified Australian businesses with a lack of cash flow, reduced their ability to operate appropriately and was the leading cause of business insolvency.
Small and medium sized businesses should not be used as a cheap source of finance through extended or late payment terms.
Voluntary codes-of-conduct relating to payment terms are no longer acceptable as Australian banks and credit services tighten their lending criteria.
Some of the largest offenders of extended or late payments are multinational companies operating within Australia. Those include mining companies, large supermarkets, and transport companies.
Australia has a healthy annual value of economic activity (GDP) worth more than $1.69 trillion dollars. Enforcing faster payment to businesses in the supply chain will yield increases in employment, security of employment and the greater prospect of wage growth as demonstrated in the United States.
Modern electronic invoicing and online banking services provide no excuse for extended or late payment, therefore One Nation will put the needs of small and medium businesses first by:
- Implementing a mandatory and maximum payment term, no later than 30 days from end of month, unless agreed at the outset of the contract.
- Add a fixed sum of compensation, interest and reasonable costs to overdue notices, with interest set at 8% plus the base rate of interest set by the Reserve Bank of Australia.
- Introduce legislation for larger businesses to publicly disclose all of their payment times and practices and performance against those terms. Larger businesses being the top 100 listed on the ASX and multinationals.
- Provide small business workshops that encourage the adoption of technology solutions, such as electronic invoicing, to assist business to streamline administrative tasks and facilitate payment practices.
- Establish a National Payment Transparency Register that ranks the payment practices of all ABN registered businesses.
- Provide additional Debt Dispute funding for State-run services.