Julian Simmonds (Ryan, Liberal National Party) Share this | Hansard source

Before I go into the details of what is a very important piece of legislation for the House today, the Payment Times Reporting Bill 2020, I want to start, if I may, by taking a moment to thank all of the hardworking small businesses in my electorate of Ryan. I know I speak for local residents when I say that we were amazed at the way our own local small businesses managed to continue to serve the community throughout the COVID pandemic, when they had been dealt the most difficult of hands. In some cases, they had to entirely close their shopfronts and go virtual. Still, these local businesses adapted and found a way. Our local gyms kept us motivated via online sessions. Our cafes converted to drive-throughs and takeaways. Our healthcare providers used telehealth consultations and provided over-the-phone advice and comfort. I am always amazed, though not surprised, by the fact that our small businesses manage to adapt to whatever circumstances they find themselves in, even ones as difficult as the global pandemic, which came on so quickly. I want to speak directly to those small-business owners in Ryan and say: 'Thank you so much for the way you have risen to the challenge of dealing with the COVID-19 pandemic and still found a way, despite all the difficulties, to serve our local community, who are so much in need. We are very much looking forward, as a government, to continuing to have a laser-like focus on creating jobs and getting you and the economy back on track.'

I grew up in a small-business family, as I'm sure many in this chamber did. My parents were running a local pharmacy, and so, from a young age, I learnt that running a business is not a nine-to-five job; you don't just get to clock off and go home. It pervades every part of family life. The lines between work and home are always continuously blurred. So, too, are the concerns, and this is an important point. When stress comes upon small-business owners—mums and dads—it comes upon the whole family, and children often bear that stress as well.

When you sit down and talk with small-business operators and ask them about their concerns, there's always a constant for them, and that is cash flow. Small businesses, if they are successful, monitor and manage cash flow constantly. It's the thing that keeps small-business owners up at night, I find, more than anything else. I certainly have very vivid memories of, after the family dinner was finished and the dishes cleared away, mum and dad spending many, many hours on the accounts at night as we kids were heading off to bed. That's what kept the small business functioning and going.

Small businesses are the most affected when it comes to longer payment terms and late payments, and this has a flow-on effect right across the economy. Small businesses that are continually chasing outstanding payments from suppliers are under significantly increased stress; the whole business is. They're under increased stress to pay employees on time, and they find it difficult to invest back in their business, because they can't get a handle on their cash flow. When they are paid on time, when they're not constantly chasing those payments, they are able to plan for the future. They are able to invest, to hire a new person, to aim to grow their small business. More than a third of small-business invoices are paid after 30 days. I'll say that again: more than a third of small-business invoices are paid after a 30-day period. And those invoices that are paid after 30 days take, on average, 63 days to be paid. How can a small business effectively manage their cash flow—particularly when it's a mum-and-dad family operation—when for 63 days after the point of sale they can't count on the cash appearing in their account? This has a very significant impact, with significant stress on the whole family and missed opportunities for small-business operators to plan and grow and invest in their business.

The commitment in the bill before us today is something that has not just been introduced as the result of a pandemic, though you could argue—and I'm sure that many on our side of the chamber would—that the recent events of COVID-19 have made the importance of this bill even more stark. But it wasn't COVID that brought this on; it was a longstanding commitment that this side of politics made in 2018 as part of our package of ongoing support for and recognition of Australian small businesses.

The Morrison government is a government that delivers on its commitments, and this legislation fulfils that pledge we made to require large businesses and government enterprises with a total income of over $100 million to publish information on how and when they pay small businesses. A culture of longer payment terms is one that the Australian economy simply cannot withstand. We certainly cannot withstand it in the current environment, as small businesses are desperately trying to get back on their feet. This bill will ensure that Australian small businesses will not suffer the flow-on effects of slow invoice payments.

Large businesses, particularly in the current COVID conditions, are the stewards to the supply chain and they need to be aware of the role that they are playing as we look to our recovery phase. The Prime Minister has directly spoken several times to large businesses during COVID, asking them about the need to step up by keeping connections with their employees—keeping their employees in jobs wherever possible by having increased flexibility and supporting small businesses. Payment terms is a fantastic example of how large businesses can support small businesses and support the entire supply chain.

Many have done that. Many large businesses have risen to the challenge. Many have gone above and beyond expectations. Unfortunately, some are still taking longer to pay their bills, and this is cascading through the entire economy. In normal economic conditions, late payments are a constant challenge. In the current economic conditions, late payments could lead to the small business no longer being able to operate. It could literally be the death knell of these small businesses.

The bill we debate today, in its unamended form, will see a requirement for large businesses to submit a payment times report showing the shortest and longest standard payment periods offered; showing the proportion of small business invoices paid between less than 21 days, 21 to 30 days, 31 to 60 days and more than 60 days; as well as showing the proportion of all goods and services procured by the business that was from small business. This increased level of transparency will not only give small business operators a clearer understanding of the customers that they are seeking to engage with but will mean that large businesses that may have been previously dragging their feet in their payments or practising unfair payment terms will seek to do better. We'll ensure that small businesses have reliable information to review when making decisions about who they do business with, providing a level of choice that doesn't currently exist. This information will be available not just for small business but to any member of the public.

Community expectation, now more than ever, is that we all have a part to play in our economy and our recovery. We have some very savvy and switched-on consumers. They want to see everybody in our economy pull their weight to help small business, to help all Australians, get back to work and back into business. I know that Australian customers of a business that is outed as having bad or unethical practices that hurt their suppliers, that they take too long to pay, would be suitably disappointed. In most cases, that customer, that savvy consumer, when provided with that information and that choice, is going to be very quick to seek an alternative company to give their patronage to. Conversely, I know Australians will be seeking to give their business to companies that are doing the right thing by small business, who are paying on time and therefore helping to protect and restore Aussie jobs at a time when we need it most.

We have already seen the benefits of the approach in the bill in shining a light on bad payment behaviour. Recently, businesses such as Rio Tinto and Telstra rapidly abandoned payment practices which negatively impacted on small businesses once they were subjected to the kind of public exposure that would become routine in this bill. As a result of the community concern, their payment policies were shortened to ensure suppliers were paid within 20 days. When big business reacts so quickly to community expectations, as they have in this instance, we know that they will be equally influenced by the payment times reporting scheme contained in this bill.

This is real and lasting reform that shines a light on bad behaviour in order to stop it and, importantly, prevent it. It is helping our economy with transparency, not taxes. We're not burdening the economy further with restrictions and red tape; we're opening the door for businesses to do the right thing—as, frankly, they should be—and to do it in a transparent way so that they are rewarded by consumers for doing the right thing.

The Morrison coalition government is a consultative one, and the legislation before us today in its unamended form is the result of extensive work with industry and representatives from both large and small business. They have a crucial part to play in this process, and they're architects of this solution. I want to particularly pay tribute to Minister Cash for the fantastic work that she and her team have done in undertaking this consultation and bringing this important bill before us.

Of course, it isn't just large businesses that our SMEs deal with; it's government too. So we have also made sure—and all credit to Minister Cash for ensuring this—that we are always doing the right thing by them. Since July 2019, our Commonwealth agencies have paid invoices for contracts of up to $1 million within 20 calendar days or else, quite rightly, paid interest on any late payments. In addition, from the start of this year, e-invoices have been paid within five days and, if they aren't, we pay interest, making it easier to do business with the government.

In talking about this bill, I can't help reflecting on the fact that, as the son of a small-business owner, I know how important this is to small businesses—to make sure that they have security with their suppliers, knowing that they can manage their cash flow and that they can make investment decisions to grow and expand their business and to do what small business does best for our country, which is to create jobs. I'm very pleased to see this government strongly support small business, as I do personally, and I commend the unamended bill to the House.

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