Carina Garland (Chisholm, Australian Labor Party) Share this | Hansard source

I'm really pleased to rise in support of the Payment Times Reporting Amendment Bill 2024. This is fulfilling a commitment that we took to Australians at the last election. This important piece of legislation delivers on our commitment to the nation. Our commitment was to deliver legislation to improve payment times to small businesses, with an emphasis on payments being made within 30 days or less. As part of delivering on this commitment, our government commissioned Dr Craig Emerson to undertake a review of the Payment Times Reporting Act 2020, which has helped to inform how this legislation has been written and will be implemented.

The review by Dr Craig Emerson found that, in its current form, the Payment Times Reporting Scheme is ineffective, so this bill overhauls the Payment Times Reporting Act 2020 to level the playing field and encourage large businesses to treat their small-business suppliers fairly. The treatment of small business by large business through this mechanism forms the essence of this legislation, and I think it's something that all fair-minded Australians would believe is the right thing for their government to do. We are acting on our commitment that we made during the election. We know small businesses are the backbone of the Australian economy, employing more than five million people and contributing more than $500 billion to the national economy.

In my own electorate of Chisholm we are home to 22,545 small businesses, employing tens of thousands of people in my community. These small businesses make an enormous contribution to the fabric of my community. One of my favourite parts of the job is getting to meet and know many small-business owners in the electorate. We recently launched our Chisholm 'shop local' initiative. I was so delighted to host our wonderful Minister for Small Business at a local small-business roundtable recently. I really want to thank everyone who participated in that event. My most recent Shop Local, Love Local campaign has been to encourage the Chisholm community to support local businesses in the lead-up to Mother's Day. My office created the Chisholm Mother's Day gift guide, featuring amazing local businesses, encouraging the community to both shop local and love local. At the end of last year, I was really pleased to see a local small business featured in the parliament gift shop, Tinta Crayons. There are still products available there, if people would like to see some of the fantastic work being undertaken in my electorate and being brought to our nation's capital.

The businesses that I feature in my gift guides and that I promote throughout my community and shop at as well are the ones that stand to benefit most from the legislation before the House. We know how important cash flow and payment times are to small businesses, particularly for small businesses who supply goods and services to larger companies. It's unfair for those larger corporations to delay paying small business invoices. Customers would never think of walking into our local bakeries, newsagents or coffee shops and trying to get away with 90-day payment terms. So this is an important step forward in bringing fairness into our business landscape. We know that late payments affect the cash flow of the business owed the outstanding debt, which forces many small businesses to find ways to finance that shortfall in their working capital and this restricts the ability of small business to use their cash flow to grow or invest in new products and services. We also know that a lack of cash flow is the leading cause of business insolvency.

Unfortunately, we also know that there has been a growing trend in payment practices, particularly amongst larger multinational businesses, to extend payment times to Australian small businesses. That growth in extended payment times is partly linked to the practices of multinational businesses applying global policies to improve their working capital efficiency. This effectively renders Australian businesses as the low-cost financiers of large and multinational corporations, and that should simply not be so.

It is a matter of fairness that this legislation addresses. It helps to level the playing field for small businesses right across Australia and for the more than 22,000 small businesses in my electorate of Chisholm. Our reforms will reduce regulatory burdens for reporting entities with obligations under the act, incentivise large businesses to improve their payment times and streamline processes and remove inefficiencies. Reforms will also improve outcomes for small businesses and incentivise large businesses to make prompt payment. That includes a shift to consolidated reporting in accordance with Australian accounting standards to improve the quality, completeness and comparability of reported data. Additionally, a mechanism for the Minister for Small Businesses to give a direction to an entity in the lowest 20 per cent of payers overall or industry to make enhanced disclosures is contained here as well. The minister can direct a slow-paying entity to state on its website and in procurement ESG related and other documents that it is a slow small-business payer as well as to inform the market on how to access its payment time reports. The payment times reporting regulator will then place a record in the payment times reporting register that the entity is a slow small-business payer.

These are important reforms and will function as both incentive and disincentive for large businesses as it relates to their small-business payment times. With faster payment times, improved cash flow and fewer administrative burdens, our reforms will make a real difference. We know that better payment times benefit everyone, which results in gains to productivity, supporting higher wages and profits and expanding employment opportunities.

These reforms are an important part of the Albanese Labor government's better deal for small business. We are delivering for small businesses, helping them to bounce back from challenges and improving their long-term resilience. Our budget is helping to ease the pressure on Australia's small businesses by providing more than $640 million in practical and targeted support. We're extending the $20,000 instant asset write-off, making it easier for small businesses to invest in their business. We'll provide additional targeted energy relief of $325 to around one million eligible small businesses through the Energy Bill Relief Fund. This builds on the up-to-$650 rebate that is being provided in this budget year.

Our government is also investing $18.3 million in two innovative programs—the cyber health check program and the Small Business Cyber Resilience Service—to help small businesses build their resilience to and bounce back from cyber attacks. This is in addition to the existing $23.4 million our government is committing to the Cyber Wardens program delivered by the Council of Small Business Organisations Australia. We've already delivered $18.6 million to help support small businesses adapt and build resilience through digital technology through the latest round of Digital Solutions, and we are continuing to strengthen this vital sector by investing an additional $10.8 million to extend access to free mental health and financial counselling support for small business owners. This additional funding builds on the $15.1 million we've already invested in these programs.

We've also updated the Commonwealth procurement rules, with small businesses getting a larger slice of the $75 billion in contracts that the Australian government spends every year. This will result in a 20 per cent target for small businesses when it comes to government procurement spend. Unfair contract terms are now illegal, thanks to our action, so small businesses can negotiate fairer agreements with large partners. We've also responded to Dr Michael Schaper's review of the Franchising Code of Conduct.

Our government is committed to supporting small business and investing in their future and the ambitions and aspirations of small business owners right around the country, because we know that small businesses are vital to the fabric of Australian society. We will always do what we can when we can in order to help small businesses and the communities they serve. I want to take this opportunity now to thank the small business community in my electorate of Chisholm. Our government does not underestimate the investment in resources, time and community that it takes to operate a small business, to recruit and train employees, to organise payroll and to build a future for those owners and their families. Indeed, I grew up in a household where my family ran a small business. I trust these reforms will make a meaningful difference to small businesses right across my electorate of Chisholm and across the country. I'll also take this opportunity to remind people to shop at and love their local small businesses. Thank you so much.

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