James McGrath (Queensland, Liberal National Party) Share this | Link to this | Hansard source

The committee is considering the Payment Times Reporting Bill 2020 and a related bill. We are dealing with government amendments (1) to (17) on sheet RS116.

Michaelia Cash (WA, Liberal Party, Minister for Employment, Skills, Small and Family Business) Share this | Link to this | Hansard source

Very briefly, in speaking to the government amendments which I moved prior to this debate recommencing, the Senate Education and Employment Legislation Employment Committee considered these bills in detail and recommended that they be passed. I thank the chamber for the support of this bill. The committee also recommended that a review of the Payment Times Reporting Scheme occur two years after its commencement. I agree with the committee's recommendation. In addition to agreeing to this measure, further government amendments to the bill have been made in response to feedback provided by various parties. The key amendments to the bill include reducing the transition period for the introduction of compliance and enforcement measures from 18 months to 12 months; moving the definition of 'small business' to the bill and inserting a new legislative note to the definition; requiring a payment time report to include additional information on payments made beyond 60 days, including payments made more than 120 days after a small business's invoice is issued; and moving more content requirements of a payment time report from the draft subordinate legislation into the main bill, including details such as the reporting entity's name, ABN and main business activity. Other technical amendments to the bill include ensuring that most reporting entities start their first reporting cycle on the scheme's commencement and requiring businesses to report in a form and manner approved by the Payment Times Reporting Regulator. I therefore commend the amendments to the Senate.

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

Labor will support the government's amendments. In particular, we welcome the government listening to Labor and stakeholders about amending the reporting requirements so that large businesses with egregiously long payment times such as 180 days can't hide this data in the 60-days-or-greater threshold that exists in the original legislation.

Question agreed to.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

[by video link] I move Pauline Hanson's One Nation's amendment on sheet 1026:

(1) Page 46 (before line 10), before clause 58, insert:

57B Requirements for review

(1) Without limiting section 57A, the review must consider the following:

(a) whether the operation of this Act is meeting the objects set out in section 3;

(b) whether related government policies, including policies relating to electronic invoicing, have improved the payment terms and practices of reporting entities in relation to their small business suppliers;

(c) whether other measures such as mandating one or more maximum periods (the mandated maximum payment periods ) for the payment of small business invoices by reporting entities would be more effective in improving those payment terms and practices.

(2) In considering mandated maximum payment periods, the review must consider the following:

(a) how mandated maximum payment periods could best be implemented, taking into account:

(i) potential regulatory burdens on reporting entities; and

(ii) the need to avoid unintended consequences for small businesses;

(b) the mandated maximum payment periods that would be appropriate to improve payment terms and practices, including:

(i) whether mandated maximum payment periods of 30 days, 20 days, or 10 days or less would be appropriate; and

(ii) whether mandated maximum payment periods of 5 days would be appropriate if electronic invoicing were used;

(c) the impact of sector or industry-specific differences, including how mandated maximum payment periods could be imposed on sectors and industries with differing payment terms and practices;

(d) the compliance or enforcement arrangements that would be appropriate to support mandated maximum payment periods, including whether a penalty regime should be established for the following purposes:

(i) to require a reporting entity to pay small business invoices issued to the entity within a specified period, if the entity has a median payment period for small business invoices issued to the entity that is longer than the mandated maximum payment period;

(ii) to require a reporting entity that has failed to pay a small business invoice issued to the entity within the period specified in the terms of the relevant contract to pay interest on that payment.

Michaelia Cash (WA, Liberal Party, Minister for Employment, Skills, Small and Family Business) Share this | Link to this | Hansard source

The government will be supporting the amendment moved by Senator Hanson. I thank Senator Hanson, on behalf of One Nation, for her constructive discussions in relation to this bill. As I said, the government will be supporting the amendment moved by Senator Hanson on behalf of One Nation.

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

We supported the government's review into this amendment, and we support Senator Hanson's amendment to ensure that certain matters are considered by the review. While we believe the fail-safe mechanism is the only feasible way to reduce payment terms, in this parliament we don't object to these stronger terms of reference being imposed on a statutory review. I want to take this opportunity to note that such a review with these terms would help fine-tune the fail-safe mechanism before it is set to begin in our amendment. As such, I would hope Senator Hanson and Senator Roberts will consider voting in favour of the fail-safe mechanism soon. We should pass that amendment this parliament and ensure that technical clarifications can be made to it at a later date to assuage concerns Senator Hanson may have.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

If there's one thing everybody in parliament can agree on, it's that the Jacqui Lambie Network is truly the party of small business. Sure, Liberals claim they are, and now Labor say they are the real ones. I've even heard the Greens say they're the best party for small business. You all say it publicly, but when push comes to shove you'd have to agree that the Jacqui Lambie Network is the spiritual home of small business owners and you're all just saying, for the cameras, that you are but you don't really mean it.

I'm bringing this up because no party claiming to be a party for small business would design a bill like this one. The Liberal Party can't claim to be the party of small business and maintain a straight face. Surely, you'd give it up. The Labor Party says the problem with this bill is that there is not enough to protect small businesses. Hey! At least you're turning up to the party. Welcome to the main game. But you are still moving too slowly. I can tell you that people are getting pretty sick and tired of the major parties talking big and doing nothing about the problems facing small businesses. They’ve had enough of the government talking big and doing nothing about the problems facing Australian small businesses. Once again, the government is asking the Senate to consider 'do nothing' bills that won't help fix the problems that small business owners are actually facing. It's the same thing every time with these guys: more reporting, more reviews, more talk and no action. It is time to wake up.

While we stand up here debating these bills, small business owners are going to the wall because their invoices are not getting paid on time. They can't pay their rents, their suppliers or their workers. They're getting squeezed while big businesses make money off cash that doesn't belong to them. It's not right. Sadly, those small business owners aren't going to see anything change because of this proposal from the government. All they're getting is another marketing exercise—and they're not even good at them. I'm willing to bet my very last dollar that it won't do a damn thing. The only difference this proposal makes is to force big companies to admit that they're refusing to pay their invoices on time. This should have been done years ago.

It will set up a regulator to tell the public and the parliament how many businesses are waiting for more than 30 days to pay their invoices. Whoopee! How about you make them pay it within 30 days? My goodness! I'm sorry, but what a joke! What's the point of more reporting? What's the point of more talk? We already know what the problems are. We already know how big the problem is. The fact that we need to do something now should be bleeding obvious to everyone at this point. Instead of requiring more reporting, we should be forcing those big businesses to cough up what they owe. Stop worrying about your political donations from them.

We should stop letting those wealthy corporations make billions of dollars off the backs of our small businesses and send them down the gurgler, because that's what they're doing. You should stop letting those fat cats have all the power. You should stop standing by while small businesses are being run into the ground by much bigger players. Until we do something, not just about reporting, not just about watching, those small businesses are at the mercy of big businesses, and they will continue to be at the mercy of big businesses who can simply decide to do the wrong thing. And you guys do nothing. There are no penalties. It doesn't make sense that this is the system we are working with.

No-one else in the country gets to choose to ignore their bills. When I don't pay my electricity bill on time, my energy company doesn't wag their finger at me and give me a little tap on the knuckles, does it? No. They don't just put me on a naughty list that gathers dust and has no impact. They charge me a late fee. They make me pay extra to compensate them for not getting their money on time. They try to teach me a lesson. They try to discipline me. They will send debt collectors if I push them too far, and other businesses can choose not to do business with me if it affects my credit rating. That's the way things are for the rest of us.

Ordinary people have to do the right thing and pay what they owe. Why should big businesses be any different? That's right. I keep forgetting. It's because they are giving their political donations. What do you know! If they don’t pay the money that they owe on time, they should be chased for it. They should be hounded. You should put them in a damn corner and discipline them. They should cop a fine, and a bloody big one at that. Otherwise, you are not using anything as a deterrent, except, 'Oh, hello, you are being naughty.' Jesus! Late payment should hurt them financially, not benefit them. But that's not the situation. The only reason big businesses don't pay on time is because they simply don't want to. They have no incentive to, because you're not making them. They know they can get away with pushing out payment times, because the government isn't going to force them to behave better. What's new?

They know they can ignore their bills, hold on to their money, earn interest on it and squeeze their little suppliers out there, and make them go under. And do they give a stuff? No, they don't give a stuff. Why would they?

And the government knows that you guys over on that side will turn a blind eye, just like you have done for years. This is how it is in this country. This is where we're at. That's why nearly $80 billion gets paid late to small businesses each year. That's why more than a third of small-business invoices are paid after 30 days and why late invoices take an average of 63 days to be paid. Shocking. Some of those fat cats even charge small businesses a fee if they want to get their payment in a reasonable amount of time. Isn't that absolutely bloody disgusting! That's where we're at—because you, Labor, have allowed the government to walk all over you for so long. Where is your spine for small business? Where is it?

The government's weak response to this problem doesn't reflect how deep the problem runs. A naughty list is not a punishment for those big businesses, it's the softest rap on the knuckles you can imagine—that's because, as we know, those big companies don't have any shame. They have no shame at all. They don't care about getting a bit of bad press. Why would they? They know that a bad media day will blow over. Today's news is tomorrow's fish and chips, as far as they're concerned. They know the journos will move on. The truth of the matter is that all those big businesses care about is their bottom line, nothing else—not their personnel, not their small businesses or anything else below them. They don't give a stuff. Let's be honest about that. It's in their financial interests to stuff over their suppliers, and they'll do it every single time. They won't think twice about it. And if they get caught they'll stand up, hand on heart, and say: 'Oh, we're truly story.' Jeez, give me a break. They'll go to the government, cap in hand, and they'll beg for forgiveness—which the government will give them because they're its donors. The government will roll over every time like a dog. Because that's how it works. This is how it works these days: you give us cash, and we'll leave you alone. The little guys who are trying to do the right thing will continue to get messed over and ignored. They're fighting a losing battle. I can't believe the National Party is doing it for them—oh, that's right, they get those big donations, too, from the miners and all the rest; whatever suits them. That's fine!

The little guys need the government to come out swinging and stand up for what it says about helping out small business. That's what businesses want to see. They don't want to see lip service. They actually want to see you doing something. Lip service seems to be the story of your lives these days, you Libs. Honestly, it's all lip service and no action. That could be your new motto: 'The Liberals: lip service, no action'. Small businesses need a minister to back them up, and you're not doing that. There's no way you are. You're a long way from it, because at the moment they're getting squashed under the weight of those wealthy corporations—and you know it, Minister. With everything that's going on this year, many of them won't survive, or they're not surviving now. And you're still not helping them. This government is doing nothing to stop late payments from happening. This proposal does nothing to stop late payments. Frankly, this proposal from the government is completely meaningless. It's just another line—more lip service.

Tasmanian small-business operators have had an absolute gutful. They already know that we have a problem here. It's about time the government did something about it. It's about time the government grew a spine. Tassie small-business owners need the government to back them up. They need an enforcement bill. They want to hit those big corporations where it hurts most: their bottom line. They want some payback. They want someone to stand beside them and deliver that payback so they can keep their doors open. That's why I want mandatory payment times for big businesses. I'm sick of the fact that we're letting them get away with this stuff.

Originally I wanted to force big businesses to pay up within 21 days or risk a fine. Since I've circulated my amendments, I've had conversations with the crossbench and the ALP, and I want to compromise to get this done. That's why I'll be moving an amendment to the ALP's fail-safe mechanism to make it kick within 18 months rather than three years. I'm giving big businesses a full year and a half—only because I've had to compromise, I can tell you—to get their affairs in order. And you don't think that big businesses, with all that cash, can get their affairs in order in that amount of time? You want to give them three years? I ask, what is wrong with you people? We're in a crisis. Small business can't keep their doors open, and you're not punishing big business for what they're dishing out to small businesses. What is wrong with you people? God, no wonder we're in an economic mess. You'll have more people unemployed—what is wrong with you?

The only reason they aren't doing it already is because they aren't being forced to. My amendments are an opportunity to make sure that big businesses can't get away walking over little guys any more. I won't stand back and watch this minister kick the can down the road. No-one who cares about small business should be comfortable with that. So to you in the Liberal Party over there, and to you in the Nationals: now is your opportunity to do the right thing by the small-business owners that you supposedly look out for. Support the fail-safe mechanism, and support my amendments that go along with it—because it's about time we forced big business to put their money where their mouth is. And it's the same with you, Minister: it's about time you put it up them. Start helping small business. Quite frankly, I'm calling you out today: it's not good enough for a minister.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

[by video link] I'd like to respond to what Senator Lambie just said. Small businesses have struggled with not getting payments from businesses but in terms of the legislation it has been taken into consideration that mandating a time of 30 days for businesses to pay may be a problem for the farming sector, especially now. The farming sector has contracts with the big end of town—selling their products to Coles or Woolies—and usually they do get paid within seven days, or maybe 14 days or even 21 days. But if we mandate 30 days in the legislation, you will have big business saying, 'Now I don't have to pay you until 30 days time,' and that is going to affect farmers. Different businesses have different ways of paying. The farmers may deal with companies like Elders. Farmers buy their seed, their fertiliser and what they need for farming from them. These businesses give the farmers long contracts, and that allows the farmers to get their crops in before they pay them back. If we mandate a 30-day contract, you are going to force these farmers to try and find the money to pay back these businesses.

I agree that the regime does need to be cleaned up, which is why I support the government's bill. You're going to name and shame these big businesses, which has been proven to work overseas, because people look at their payment times. There are heavy fines for businesses that don't report their payment times. That is one way to deal with it. Then it's up to the businesses themselves whether they want to do business with these other companies that are not paying. The extension times of some of these businesses are going out to 90 days or 120-plus days. This is a way of reining in those payment times. My amendment seeks to impose a two-year review period. The performance of these businesses will be reviewed, and if it hasn't worked we could then look at setting a payment time—possibly the 30 days. But we have to take into consideration the farming sector, who have advised my office that they don't want it mandated to a certain period of time. A lot of businesses have different payment times.

The government is also trying to bring in e-invoicing and encouraging more businesses to use e-invoicing and, hopefully, get their payments done within a five-day period. Proposed subsection (2)(d)(ii) in my amendment basically says that the review will look at imposing a requirement to pay interest on a payment if the reporting entity has failed to pay a small business invoice issued to the entity within the period specified in the terms of the relevant contract. So the intention is that if businesses don't pay within a specified period of time they will be paying interest to the company they owe the money to. But I believe that, under the circumstances, especially the way things are at the moment in terms of COVID-19 and how it has affected businesses, we need to have this period of time to see how this works. My amendment requires that there be a review to see whether or not it has worked and whether or not it has changed the payment times from these big businesses and companies that are actually not paying the smaller contractors. And I do say that it is very good to see that the government have now reduced their payment times and are paying under the 30 days. They've got to set the precedent for the rest of the community, and that's exactly what they have done.

I understand the frustration of Senator Lambie. I get it. We hear it all the time. I personally have been a small-business person most of my life, so I understand where you're coming from. I hear it from tradies, the people who don't get their payments, but if we go in with a sledgehammer we could end up with nothing. You've got to try and find a balance between those people who are getting their early payments and those people who are actually paying over excessive time frames.

I support the bill as amended by my amendments. If it doesn't work, we will have in place a mechanism to rein in businesses, bring in heavy fines and look at mandating payment times then. Let's get feedback from the community to see how businesses feel about it and see whether or not it is working. If it's not working, then we can come in very hard to try and address the imbalances. I believe we should give it a go, and see where we stand in two years time.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

First of all, I don't know where Senator Hanson's living. Honestly, I don't. She's out there campaigning. That's what she's doing in Queensland. She'd better go and talk to some of those small businesses, I'll tell you that now. I don't know what's going on in Queensland, but in Tasmania those small businesses want to be paid within 30 days. They are not surviving. That is the truth of the matter. There is no way the Jacqui Lambie Network will support that amendment.

Question agreed to.

by leave—I move amendments (1) to (4) on sheet 8972 together:

(1) Clause 1, page 1 (line 8), after "Reporting", insert "and Enforcement".

(2) Clause 3, page 2 (after line 23), at the end of the clause, add:

  ; and (c) to enforce the payment of small business invoices by a reporting entity within 21 days of issue.

(3) Clause 4, page 3 (after line 9), after the paragraph beginning "A reporting entity", insert:

A reporting entity must pay a small business invoice within 21 days of the issue of the invoice.

(4) Page 21 (after line 26), after Part 3, insert:

Part 3A—Enforcing payments

Division 1—Introduction

27A Simplified outline of this Part

This Part imposes an obligation on a reporting entity to pay a small business invoice within 21 days of the issue of the invoice.

A civil penalty applies to a reporting entity that fails to do so.

If a reporting entity is ordered to pay a pecuniary penalty, the Regulator must pay to the issuer of the invoice an amount equal to the penalty.

A small business supplier may request the Regulator to apply to a court for the imposition of a civil penalty under this Part.

Division 2—Payment of small business invoices

27B Reporting entities must pay small business invoices within 21 days

(1) A reporting entity must pay a small business invoice in full before the end of the period of 21 days beginning on the day the invoice was issued.

Civil penalty

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

  (a) the entity is required to pay a small business invoice; and

  (b) the entity fails to comply with the requirement in subsection (1); and

  (c) the entity is not a volunteering entity.

Civil penalty:   200 penalty units.

(3) For the purposes of subsection (2), 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 an amount equal to the lesser of:

  (a) either:

     (i) if the invoice is paid in full before the day that the order to pay the penalty is made—5% of the total amount of the small business invoice multiplied by the number of days in the period beginning on the 22nd day after the invoice was issued and ending on the day the invoice was paid in full; or

     (ii) if the invoice is not paid in full before the day that the order to pay the penalty is made—5% of the total amount of the small business invoice multiplied by the number of days in the period beginning on the 22nd day after the invoice was issued and ending on the day the order is made; or

  (b) 0.2% 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 (2).

(4) If an order is made for the reporting entity to pay a pecuniary penalty for the contravention of subsection (2) in relation to a particular small business invoice or particular small business invoices, the Regulator must pay an amount to the small business supplier that issued the invoice or invoices that is equal to the amount of the penalty.

(5) Amounts payable under subsection (4) are to be paid from money appropriated by the Parliament for the purposes of this section.

27C Requests for Regulator to apply to court for the imposition of a civil penalty

(1) A small business supplier may request the Regulator to apply to a court for the imposition of a civil penalty under section 27B.

(2) A request under subsection (1) must be in such form and be accompanied by such information as is required by the Regulator.

(3) Subject to subsection (4), if the Regulator is satisfied that the reporting entity has failed to comply with the requirement in subsection 27B(1), the Regulator must either:

  (a) notify the reporting entity of its obligations under this Part and its liability for a penalty (issue a warning); or

  (b) apply to a court for the imposition of a civil penalty under subsection 27B(2).

(4) If the Regulator has already issued a warning to the reporting entity on 3 separate occasions in the 3 years preceding the request, the Regulator must apply to a court for the imposition of a civil penalty under section 27B.

  Note: The Regulator may apply to a court for the imposition of a civil penalty even if the Regulator has not already issued a warning to the reporting entity on 3 separate occasions over a period of 3 years.

(5) The Regulator must notify the small business supplier of the action that the Regulator has decided to take as soon as practicable, but in any case by not longer than 4 weeks after the request is made.

Question negatived.

Don Farrell (SA, Australian Labor Party, Shadow Special Minister of State) Share this | Link to 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.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

by leave—I move amendments (1) to (4) on sheet 1013 together.

(1) Amendment (11), section 37A, omit "after the first 3 reporting periods".

(2) Amendment (11), section 37A, omit "after the first 6 reporting periods", substitute "after the first 3 reporting periods".

(3) Amendment (11), subsection 37B(1), omit "after the end of 3 reporting periods after the commencement of this Act and, subsequently,".

(4) Amendment (11), subsection 37B(3), omit "after the end of 6 reporting periods", substitute "after the end of 3 reporting periods".

Question negatived.

The CHAIR: The question is that amendments as moved by Senator Farrell on sheet 8986 be agreed to.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

I seek leave to withdraw amendments (1) and (2) on sheet 8973.

Leave granted.

Bills, as amended, agreed to.

Bills reported with amendments; report adopted.