Michaelia Cash (WA, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to 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'.

Paul Scarr (Queensland, Liberal Party, Shadow Assistant Minister for Multicultural Engagement) Share this | Link to this | Hansard source

Carrot and stick.

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

Exactly. The stick—naming and shaming—gets us so far. It is the incentive—the way the coalition is changing the legislation—that actually says to big business: 'Good on you. You're doing the right thing by our small businesses in this country, and you should be recognised.' Another stakeholder said that they're broadly supportive of the proposed amendments and see them as a step in the right direction to better incentivise faster payments to small business and to better meet the revised objects of the act.

We believe that the act can enlighten the designation of a fast small-business payer with just three substantive amendments. The first of the three amendments, which we will seek to include in the new division 5 within part 2 of the act, clause 22J, introduces a 'fast small-business payer' designation to the scheme by defining and setting the threshold test for designation. A fast small-business payer will be a reporting entity or a reporting nominee that, without contrary evidence, has given the regulator payment time reports for two consecutive reporting periods, and both of those reports have a qualifying payment time of 20 days or less. That's a good thing. A qualifying payment time of 20 days or less—I prefer the 'or less'—will have the meaning given by the rules.

The second substantive provision, clause 22K, will establish a framework for how the regulator and entities will interact with the 'fast small-business payer' designation. This will require the regulator to maintain and publish a list of fast small-business payers on the register. This amendment will also permit the regulator to exclude an entity from the list for a period in specific circumstances, and, if an entity is to be excluded from the list, this amendment will require the regulator to give written notice of this reviewable decision.

The third and final substantive provision that we will be moving, to be included in the new division 5 of the act, is measures that seek to add integrity to the designation of a fast small-business payer. We will seek to include a new clause, 22L, which will prohibit false representations that a reporting entity or nominee is a fast small-business payer—quite frankly, shame on you if you are a business out there who would seek to do this—or has a qualifying payment time of 20 days or less by leaving such businesses liable to a civil penalty of 200 penalty units. Quite frankly, you deserve those 200 penalty units.

Whether in government or in opposition, it is the position of the coalition—and I have been the relevant minister in this portfolio—that we feel an obligation to act on behalf of the mum-and-dad small-business owners, as well as the young people with the ideas and the drive to fire the engine room of the Australian economy but whom might not otherwise have their interests echoing down the corridors of our parliaments.

Small businesses are the backbone of the Australian economy, and it is beholden on us, whether we are in opposition or in government, to do everything that we can to ensure that the small businesses of Australia are not just paid on time but paid as quickly as possible. I can assure you, as a former minister for small and family business, that a coalition government led by Peter Dutton will never take Australian small business for granted, and we will also never leave them short-changed. That is why we are moving the amendments that we have worked through in relation to this bill. It is one thing to name and shame a big business for not doing the right thing, but it is another to incentivise them into doing the right thing. The right thing is to ensure that our small businesses in Australia are not just paid but paid as quickly as possible. That is what you'll get under a coalition.

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise to speak to the Payment Times Reporting Amendment Bill 2024. I indicate that the Greens support this legislation. This bill increases pressure on big businesses that are slow to pay small businesses, and the 20 per cent of the slowest-paying big businesses will be reported on the Payment Times Reports Register.

Paul Scarr (Queensland, Liberal Party, Shadow Assistant Minister for Multicultural Engagement) Share this | Link to this | Hansard source

Do you support our amendments?

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I will come to your amendments, Senator Scarr, in due course. The minister will also be able to direct a slow-paying business to state on its website, in procurement and in ESG related documents that it is a slow small-business payer.

We're supporting this bill because we know that big business too often drags its feet when it comes to paying much smaller suppliers. In many circumstances, it is a concentration of market power that allows big businesses to drag their feet in such an unconscionable fashion. We heard abundant evidence about this in hearings of the Senate Select Committee on Supermarket Prices, which the Greens moved to establish and which I chaired on behalf of the Australian Greens. We heard abundant evidence from farmers and overwhelmingly from small businesses—in many situations, they were small, family businesses—about how the big supermarket duopoly used its concentration of market power to behave unconscionably with a distinct lack of ethics and a distinct lack of integrity towards its suppliers, who, as I've said, are overwhelmingly small, family businesses.

We heard evidence about the supermarket duopoly charging farmers a fee if they want payment earlier than usual. Let's be clear about this: the big supermarkets will say, 'If you want to be paid earlier than usual, you have to pay us a fee, and then we will pay you earlier than usual.' Of course farmers, who are in many cases small businesses, are often cash strapped. They often have cashflow issues, and at times they would have to sacrifice some of the profits they've made—if in fact they were making a profit, and in some cases they weren't. But they effectively had to sacrifice a bit of their price to get payment earlier than usual.

While some farmers and suppliers to the big supermarket duopoly did give evidence that they were afforded reasonable payment periods of around 14 or 21 days, we had evidence of other farmers waiting up to 120 days to be paid.

Paul Scarr (Queensland, Liberal Party, Shadow Assistant Minister for Multicultural Engagement) Share this | Link to this | Hansard source

Four months.

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Yes, as Senator Scarr has rightfully pointed out, that is four months. That is just not okay. In some cases, that would have been longer than the spuds were in the ground or the apples were on the tree. That sort of thing is not okay, and it was allowed in the supermarket sector because of the concentration of market powers.

I was very happy to see the announcement today from Mr Dutton and Mr Littleproud that the coalition are adopting a policy of supporting divestiture powers in the supermarket sector. It's on the record that the Australian Greens believe that divestiture powers should exist across our economy, and that was the framing of the legislation that we tabled and brought on in the Senate for debate and vote last week. I do note that not a single Nationals senator voted against our legislation last week, and I'm very pleased that the Liberal Party are now on board with divestiture powers, albeit with a more narrow scope to just apply them to the supermarket sector.

I will make the point that the Greens would support such a provision were it ever to be put to the Senate, and what that means is that the numbers are there to pass such a bill through this place. That means, of course, that it would be only the Labor Party standing between Australian shoppers and lower food and grocery prices. We know from the chair of the ACCC that, in the ACCC's view, if there were greater competition in the supermarket sector, food and groceries would be cheaper in Australia. Ms Cass-Gottlieb has been abundantly clear about that during Senate estimates—on more than one occasion, I might add.

So this is a moment of choice for the Australian Labor Party and for Prime Minister Albanese. Is he going to keep cuddling up to Coles and Woolworths, the giant supermarket corporations who've donated so much to the Australian Labor Party in dirty political donations over the years? Or is he going to actually take the side of Australian shoppers, who are being price gouged at the supermarket checkout? This is a moment of truth for the Labor Party. Right now it is only the Australian Labor Party that is standing between Australian shoppers and lower food and grocery prices because it is only the Australian Labor Party that is preventing divestiture powers scoped to the supermarket sector from passing this parliament and becoming law. That's where we find ourselves today post the announcement from Mr Dutton and Mr Littleproud.

What this shows, just as the banking royal commission showed, is that if you get the Greens and the Nationals on a unity ticket on something, things happen in this place. If you get someone in an Akubra standing next to someone in a koala suit, things start to happen in this place, colleagues. That's how we got a banking royal commission, and that's how we're going to get divestiture powers, scoped at least to the supermarket sector, and I hope and trust that, over time, those powers, which are scalable, will ultimately be expanded to cover the entire economy because, whether it's the airlines, the banks, the supermarkets or some parts of the energy sector in this country, we need more competition. It is competition policy 101 that, if you increase competition, you will end up with better results not just for the consumers and, in the case of supermarkets, the shoppers but also for the suppliers into those sectors.

I will tell you: if ever there was a sector ripe for divestiture powers, it would be the supermarket sector, although I have to say that I reckon the airlines are running neck and neck with them there. They are legitimately running neck and neck with the supermarket sector. Coles and Woolworths together have about two-thirds of the supermarket sector in Australia, and we know from Choice, who did really good work recently, that the choice between shopping at Coles and shopping at Woolworths is basically no choice at all. There was less than one per cent difference between Coles and Woolworths on the basket of 14 staple food and grocery items that Choice calculated the cost of.

I welcome into the chamber Senator Canavan, who did support the Greens' divestiture laws, and I want to acknowledge that. And now we can be on a unity ticket once again, Senator Canavan, when, I hope and trust, this Senate can find it within its capacity to consider legislation that would create divestiture powers scoped to the supermarket sector. But, as I was saying, the choice between Coles and Woolworths is basically zero choice at all, as the Choice work clearly showed. We know that another significant supermarket player in Australia came in far, far cheaper than Coles and Woolworths, but the big tell was that, when you compared Coles and Woolworths on the basket of 14 staple items—and they used mystery shoppers to do this, so the supermarkets had no idea that the particular shopper was buying particular items at a particular time in a particular supermarket—there was less than one per cent difference between Coles and Woolworths. Colleagues, the choice between Coles and Woolworths is no choice at all, and that is because there is too much market concentration in the supermarket sector. Coles and Woolworths together have about two-thirds of the market share on a national basis.

What we've got from Labor on divestiture is this weird fantasy from the Prime Minister that these are 'Soviet-style' powers. Of course, that renowned command-and-control economy, the United States of America, has had divestiture powers in place since 1890 and they've been used very successfully to bust up big corporations who were price-gouging customers and had too much market share. They broke up the monopolies that the robber barons held in many sectors in the late 1800s and early 1900s, and that's because divestiture powers deliver good outcomes for consumers. In fact, the Soviet union doesn't have divestiture powers—news flash for the PM. That's why the oligarchs are busy price-gouging the people in the Soviet Union. Where we do have divestiture powers—for example, in the US and in many countries in the EU—we are seeing them used in order to take on supermarket concentration, such as in some cases right now in the European Union. And they're doing that because they know it will put downward pressure on food and grocery prices. Australians are getting smashed at the moment, wherever they turn—whether it's rents, whether it's their mortgage payments, whether it's energy bills, whether it's school fees, whether it's GP visits or whether it's price gouging by the supermarket sector. We need to take action!

Debate interrupted.