Michaelia Cash (WA, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Hansard source

I rise to speak on the Payment Times Reporting Amendment Bill 2024. In commencing my remarks, I note that the coalition will be moving amendments. These amendments were foreshadowed by my colleague in the other place, the shadow minister for small business, the Hon. Sussan Ley, on 4 June 2024. At that time, the shadow minister rightly reminded the other place:

It is critical that we balance the need for regulation with the need to maintain a dynamic and competitive marketplace for Australian businesses small and large—

to flourish in. The shadow minister concluded her speech in the other place by promising that the coalition would:

… work with all parties in the Senate to propose sensible amendments which better align the commercial incentives that operate within the bill with the amended objects of the act.

That is exactly what the coalition has done. The coalition has engaged with 13 relevant stakeholder organisations to consider amendments, and it has drafted them through the Senate procedure office. Instead of seeking to oppose or to block this bill in the Senate, the coalition has worked constructively and in good faith to improve the operation of the scheme and, in doing so, improve the speed by which big businesses pay Australian small businesses. The cash flow of Australian small businesses is too important a thing to play politics with, and we in the coalition feel it is incumbent upon us as the party of small business to not leave small business short-changed.

We know, as the shadow minister for small business has said, that, if cash is king for Australian small businesses, then cash flow is the kingmaker. Whilst well intentioned, the half-hearted approach of the government at this otherwise challenging time for Australia's small businesses would not move the needle by anywhere near the extent needed for a material improvement in small business payment times. The coalition saw the approach set out by the government in this bill to be confined to using a big stick to improve the small business payment time practices of big businesses.

This bill permits the naming and shaming of large businesses that have a record of being slow to pay their small-business suppliers, service providers and contractors. The approach of the government is intended to improve small business payment times, and the government should be commended for its attempt to improve this scheme to achieve such an outcome. This approach, however, ultimately fails to recognise the reality that a big business, typically operating with considerable resources, is well practised at running from the big stick of government intervention. The coalition considers that, left unamended, this bill might have the perverse effect of reducing commercial engagement with Australian small businesses by big businesses, and that is not an outcome that we wish to see. Why? Because this of course would mean less opportunity, less growth and, in particular, less cash for small businesses, at a time when they need it more than ever because of the cost pressures they are under.

There are some who might say that this bill does not go far enough in using the big stick of government and that more regulation and harsher penalties should be used to compel big businesses to pay Australian small businesses faster. We know that more and harsher regulation would only mean that a big business would run faster and further from being designated as a slow payer and, in all likelihood, without actually addressing the paramount challenge of improving its small business payment time practices. At the end of the day, that is what we want to see, as the coalition. We want to see big businesses actually recognising that, if you're doing the wrong thing by small business, guess what: you need to improve what you do and you need to ensure that our small businesses are paid on time. Quite frankly, anything less than that is not doing justice to small business.

The coalition has therefore designed amendments which complement those contained within the bill and introduce the designation of a 'fast small business payer' to the Payment Times Reporting Scheme. Why is the coalition moving these amendments to this bill and introducing the designation of a fast small business payer to the scheme? It's because we know that, just as big business might be well practised at running away from the big stick of government, they are likewise well practised at running towards the big carrot when it is dangled in front of them. We on this side of the chamber know that it is only when a stick is coupled with the carrot approach that we can orient the incentives otherwise faced by big business towards a material improvement in small business payment practices and indeed a reduction in small business payment times. Again, that is what we are all about on this side of the chamber, the coalition side. We want to see our small businesses paid as quickly as possible.

In designing the 'fast small business payer' designation, the coalition consulted with relevant and engaged stakeholder organisations which represent the interests of small business—yes, that's right, the interests, in particular, of small business. But we also spoke to big businesses and several industries where constituent companies are more typically required to report to the regulator as part of the scheme. It should be noted that, whilst the coalition certainly values enterprise and the opportunities created by the private sector more broadly, the coalition was prepared to engage with stakeholder organisations that had publicly stated support for the bill and the reforms contained therein. Indeed, many of these stakeholder organisations did not, and do not, reserve much of the scepticism that the coalition maintains with respect to many aspects of this bill—especially with respect to how and to what end ministerial discretion is promoted in this bill. The feedback the coalition received on what we are putting forward, which is the fast small business payer designation, was overwhelmingly positive. That is a good thing. People want to see this designation within this particular scheme, and that overwhelming feedback came to us despite, as I outlined, the broad cross-section of commercial interests that we consulted with in drafting the amendments that we will move to the bill.

I want to take the Senate through a snapshot of some of the feedback that stakeholder organisations were prepared to put their name to as we sought to work across party lines to advance the interests and improve the cash flow of Australian small businesses. One said this: 'The work that you've done to find a way to reward those companies who can be identified as fast payers goes a long way to support more incentives for the larger businesses around payment times.' A second said, 'If there is a stick to name and shame businesses that meet the criteria under the legislation, it makes sense that there is also a carrot to incentivise faster payment times.' Again, isn't this what this bill is meant to be doing—incentivising faster payment times? It's one thing to name and shame people—okay, so now you've been named and shamed; now what do we do? It's another thing to say, 'Yes, we'll name and shame you, but at the same time we will incentivise you to become what we want you to become, which is a big business that pays its small businesses, and doesn't just pay them but pays them faster.' Hence, the fast small business payer designation.

Now, this is what a third business said to us during the consultation: 'These amendments are a positive incentive for big businesses to meet minimum expectations for smaller businesses in the supply chain without presenting an overwhelming, negative burden for either. I have to say, I'm most disappointed that we're only talking here about minimum expectations. I thought, quite frankly, minimum expectations—as they well and truly are—are the least we should be expecting of big business.'

A fourth 'called for the introduction of a fast small business payer designation to promote companies that pay small business suppliers promptly and to provide reporting entities with a goal to work towards'—and told the coalition that 'amendments to this effect are welcome'.

A fifth said this: 'A fast small business payer designation would be a positive step towards incentivising and promoting faster payment times by a big business to small entities.' A sixth said this: 'This is a positive step towards improving payment behaviour across the economy.' Another said they would support the regulator being given the authority to explicitly name reporting entities with best practice payment times and practices. Another said, 'Whilst penalising slower payers is one strategy, we believe'—backing in the coalition's amendment—'that fast payers should be recognised effectively, adopting a two-pronged approach that includes a deterrent', as we talked about, and 'also the incentive that is going to incentivise big businesses to do the right thing by small businesses'.