Don Farrell (SA, Australian Labor Party, Shadow Special Minister of State) Share this | Hansard source

by leave—I move opposition amendments (1) to (3), (5), (6) and (8) to (11) on sheet 8986 together:

(1) Clause 3, page 2 (line 23), after "practices", insert ", including paying small business suppliers in less than 30 days".

(2) Clause 5, page 5 (after line 23), after the definition of notifiable event, insert:

payment time,for an invoice, means the number of days in the period beginning on the day a small business supplier issued the invoice to the reporting entity and ending on the day that the invoice was paid in full.

(3) Clause 5, page 6 (after line 3), after the definition of protected information, insert:

recalcitrant reporting entity means a reporting entity declared under subsection 37B(5) to be a recalcitrant reporting entity.

(5) Clause 5, page 7 (after line 10), after the definition of subsidiary, insert:

supply chain financing arrangement means an arrangement under which a reporting entity undertakes to pay an invoice before the end of the relevant supply payment period if the supplier agrees to accept a discount on the payment or to incur an additional cost.

supply payment period means a period within which a payment under a contract is required to be made in relation to a supply of goods or services.

(6) Clause 14, page 13 (after line 11), after paragraph (1)(c), insert:

(da) state the median payment time for all small business invoices paid by the entity during the reporting period; and

(db) state the average payment time for all small business invoices paid by the entity during the reporting period; and

(8) Clause 14, page 13 (after line 28), after paragraph (1)(h), insert:

(ha) include information and documents about any supply chain financing arrangement entered into by the entity in relation to a small business supplier; and

(9) Clause 17, page 16 (line 6), after "without charge", insert "and in a machine-readable format".

(10) Page 25 (after line 15), at the end of Division 2 of Part 4, add:

30A Role of the Australian Small Business and Family Enterprise Ombudsman

(1) To avoid doubt, nothing in section 30 limits the operation of the Australian Small Business and Family Enterprise Ombudsman Act 2015.

(2) The Ombudsman may inform the Regulator of an alleged contravention of this Act by a reporting entity either:

  (a) at the request of a small business supplier; or

  (b) if the Ombudsman has otherwise become aware of an alleged contravention.

(3) Within 30 days of being informed of an alleged contravention under subsection (2), the Regulator must respond to the Ombudsman to advise:

  (a) if the Regulator decides to take action in relation to the alleged contravention—of the Regulator's findings in relation to the alleged contravention and the action that the Regulator intends to take; or

  (b) if the Regulator decides not to take action in relation to the alleged contravention—of the Regulator's findings in relation to the alleged contravention and the reasons that the Regulator has decided not to take action; or

  (c) that the Regulator has required the reporting entity to appoint an auditor to carry out an audit in relation to the entity's compliance with this Act under subsection 30(2) but:

     (i) the entity has not yet given the Regulator a written report setting out the results of the audit; or

     (ii) the Regulator has otherwise not yet made a decision on what action the Regulator intends to take in relation to the alleged contravention; or

  (d) that the Regulator is using or has used:

     (i) the Regulator's monitoring powers under Part 2 of the Regulatory Powers Act; or

     (ii) the Regulator's investigatory powers under Part 3 of the Regulatory Powers Act;

  in relation to the alleged contravention but has not yet made a decision on what action the Regulator intends to take; or

  (e) that the Regulator has otherwise not yet made a decision on what action the Regulator intends to take and the reason that the Regulator has not yet made a decision.

(4) If the Regulator responds to the Ombudsman under paragraph 30A(3)(c) or (d) the Regulator must also inform the Ombudsman, as soon as practicable after the Regulator decides to take, or not to take, action in relation to the alleged contravention, of the Regulator's findings in relation to the alleged contravention and:

  (a) if the Regulator decides to take action—the action that the Regulator intends to take; or

  (b) if the Regulator decides not to take action—the reasons that the Regulator has decided not to take action.

(5) If the Regulator advises the Ombudsman under paragraph 30A(3)(e) that the Regulator has not yet made a decision on what action the Regulator intends to take, the Regulator must inform the Ombudsman, at intervals of no longer than 30 days until the Regulator has responded to the Ombudsman under any of paragraphs 30A(3)(a) to (d), of the reason that the Regulator has still not made a decision.

(6) In this section, Ombudsman means the Australian Small Business and Family Enterprise Ombudsman established under the Australian Small Business and Family Enterprise Ombudsman Act 2015.

(11) Page 33 (after line 23), after Part 4, insert:

Part 4A—Payment times failsafe mechanism

Division 1—Introduction

37A Simplified outline of this Part

This Part creates a payment times failsafe mechanism that is intended to provide an incentive for reporting entities to collectively improve their payment practices or run the risk of more stringent regulation.

The Regulator is required to report to the Minister after each reporting period after the first 3 reporting periods on the median and average times taken by all reporting entities to pay small business invoices.

The payment times failsafe mechanism is triggered if, after the first 6 reporting periods, the median of the median times reported by all reporting entities to pay small business invoices for a reporting period is more than 30 days. The Regulator must report this fact to the Minister.

Once the payment times failsafe mechanism has been triggered the Regulator must declare any reporting entity that has a median payment time for small business invoices of more than 30 days during a reporting period to be a recalcitrant reporting entity.

A recalcitrant reporting entity is required to pay all small business invoices within 30 days and is liable to a civil penalty if it fails to do so. The rules may provide for exemptions from this requirement.

Division 2—Late payment penalty

37B Payment times failsafe mechanism

Report on median and average payment times

(1) As soon as practicable after the end of 3 reporting periods after the commencement of this Act and, subsequently, after the end of each reporting period, the Regulator must give the Minister a report that states:

  (a) the reporting period or reporting periods to which it relates; and

  (b) the number of reporting entities that submitted a payment times report or payment times reports to the Regulator relating to the reporting period or reporting periods; and

  (c) the median of the median payment times reported by all reporting entities that submitted a payment times report or payments times reports to the Regulator relating to the reporting period or reporting periods; and

  (d) the average payment time for all reporting entities that submitted a payment times report or payment times reports to the Regulator relating to the reporting period or reporting periods.

(2) The Minister must cause a copy of a report to be tabled in each House of the Parliament within 5 sitting days of receiving it.

When the payment times failsafe mechanism is triggered

(3) The payment times failsafe mechanism is triggered if, after the end of 6 reporting periods after the commencement of this Act, the median of the median payment times under paragraph (1)(c) for a reporting period is more than 30 days.

(4) The report given to the Minister by the Regulator under subsection (1) in relation to the reporting period in which the payment failsafe mechanism was triggered, and each subsequent report given to the Minister in relation to subsequent reporting periods, must contain a statement that the payment times failsafe mechanism has been triggered.

Declaration that a reporting entity is a recalcitrant reporting entity

(5) If the payment times failsafe mechanism has been triggered, the Regulator must declare that a reporting entity is a recalcitrant reporting entity if:

  (a) the entity is not a volunteering entity; and

  (b) the entity's median payment time was more than 30 days during:

     (i) the reporting period in which the payment times failsafe mechanism was triggered; or

     (ii) any subsequent reporting period.

(6) The Regulator must write to a recalcitrant reporting entity as soon as practicable after the Regulator has made a declaration under subsection (5) in relation to the entity to inform the entity of the declaration and of the entity's obligations under subsection (8).

(7) A declaration by the Regulator under subsection (5):

  (a) is not a legislative instrument; and

  (b) has effect for a period of 2 years beginning on the day the declaration is made.

Recalcitrant reporting entities to pay small business invoices within 30 days

(8) A recalcitrant reporting entity must pay a small business invoice in full before the end of the period of 30 days beginning on the day the invoice is issued.

(9) Subject to subsection (10), the rules may provide that the requirement in subsection (8) does not apply in relation to a specified entity or specified entities either generally or in specified circumstances.

Note: An entity that wishes to rely on an exemption in the rules in relation to a contravention of a civil penalty provision bears an evidential burden (see section 96 of the Regulatory Powers Act).

(10) Rules may only be made for the purposes of subsection (9) after the payment times failsafe mechanism has been triggered.

Civil penalty

(11) A reporting entity is liable to a civil penalty if:

  (a) the entity is a recalcitrant reporting entity; and

  (b) the entity fails to comply with the requirement in subsection (8); and

  (c) the entity has not been exempted from the requirement in subsection (8).

Civil penalty:   350 penalty units.

(12) For the purposes of subsection (11), the reference in paragraph 82(5)(a) of the Regulatory Powers Act to 5 times the pecuniary penalty specified for the civil penalty provision has effect as if it were a reference to 0.6% of the total income for the person for the income year in which the contravention occurred.

Note: This subsection modifies the maximum pecuniary penalty that a body corporate can be ordered to pay for a contravention of subsection (11).

We won't move amendments (4) and (7) on sheet 8986 as those matters have been dealt with in agreement with the government's amendment. Also, proposed subsections in amendment (6) have been renamed '(da)' and '(db)' as a consequence of agreeing to the government's amendment.

In terms of the broader amendments, Labor believes that complementary back-up measures are necessary to ensure the Payment Times Reporting Scheme improves general payment times to small business. Our amendments would introduce a fail-safe mechanism. That fail-safe mechanism means that over the next few years, if the government's scheme does not broadly improve payment times to small businesses to 30 days or less, the mechanism is triggered. I could go on a little bit but, in the interests of time, I will limit my comments to that and ask that the Senate support my amendments.