16 May 2017
Transcript - #2017029, 2017

Interview with Ben Davis, 4BC

JOURNALIST:

Small businesses are being held to ransom by larger companies failing to pay their bills on time. Sound familiar? If you’re a small business, how long have you had to sweat it out for invoices to get paid? 30 days? Yeah you wish. 60 days? 90? 120? The bigger the company, the bigger the wait, right? Well, you’re not alone. The number one issue for small business around the country is getting invoices paid on time. And last month, you’ll remember I spoke to the Ombudsman on this, Kate Carnell, after their inquiry found more than 40 per cent of you reported late payments in the last year. Now, I know of one contractor here in Brisbane who waited 360 days to get paid by a prominent sporting organisation. $30,000 he was owed, 5 days shy of a year. Imagine having a $30,000 hole in your budget waiting to get paid. Now, the day I spoke to Kate she had met up with the Federal Small Business Minister, Michael McCormack, and Michael is in the Sunshine state this week helping celebrate Queensland Small Business Week. Minister, where do we find you, good afternoon?

MCCORMACK

Driving at the moment, between Beenleigh and Lismore and we’re on our way down to Kevin Hogan’s Page electorate to conduct a National Small Business Roadshow in Lismore. But certainly as you mentioned, it’s Queensland Small Business Week. That is very much our focus this week and that is why I am in Queensland. I’ve been in Beenleigh, I’ve been to the Sunshine Coast, I’ve been to Bundaberg talking up small business and of course the measures that we introduced in last Tuesday’s Budget.

JOURNALIST:

Alright, and I’ll get on to invoices and late payments in a tick. What have small businesses here in Queensland been telling you over the last couple of days?

MCCORMACK

They’re delighted that we’ve extended the small business measures as far as the instant asset write off for small business, now up to $10 million turnover for 12 months. So there’s a 12 month extension. They can buy capital equipment to improve productivity and efficiency, and indeed get more customers through the door.

I’ve heard many personalised examples of some of the items that have been bought. At a jewellery shop in Bundaberg yesterday, the owner Kate told us how she’s buying more equipment to help her dad who makes their handmade jewellery, and how they’re investing in that. Little coffee shops, which are buying industrial dishwashers and the like to get their cups cleaned quicker so they can get their coffees on the table quicker. Those sorts of things are available under that plan and the fact that we’ve extended it by 12 months has been really good for small business.

JOURNALIST:

I’m a big fan of this. It keeps money ticking over for not only small business, but in the economy as a whole. And what we’ve seen, and what we’ve been speaking about with small businesses is where I come into the late payments and invoices. Now, you know because you used to run a small business before getting into politics –

MCCORMACK

Indeed I did, and the tax rate was a lot higher than the 27 and a half per cent it is now.

JOURNALIST:

There you go, that’s another tick. But, the late payments – we know that the larger the company, the longer that they delay the late payments. This not only cripples small business, but it just slows the whole economy down. Now the Ombudsman called on the Government to legislate payment times, business to business. Will you?

MCCORMACK:

I’ve received the inquiry and I’m reviewing it very, very carefully before I respond. Obviously we’ve had the Budget in the meantime and the inquiry report was given to me mid-April. I don’t want to regulate payment times, but if change doesn’t happen, I certainly will consider it. It’s unacceptable for big business to use small businesses as banks. I’ve said that. There is a growing trend among large and multinational companies to extend payment times. Payment terms and times up to 120 days is simply unfair. It’s not right. The inquiry recommended legislating ASX 100 disclosure and payment times.

The Government has adopted 30 day payment times. Through the supply chain we’re paying 97 per cent of invoices under $1million dollars within 30 days – we’ve done that for the last two financial years.

JOURNALIST

Now just on that, I know Kate Carnell said that Canberra can lead the way and set an example and cut your payment times to 15 business days.

MCCORMACK

She certainly did and we’re looking at that at the moment.

JOURNALIST:

It sets an example.

MCCORMACK

The systems at the moment allow us to do 30 days. That’s been a big step forward for Government. Kate Carnell has done a body of work on that. It’s a really important body of work and I am certainly considering it very seriously. I have had the Budget to bed down first of all and the Enterprise Tax plan to get through the Parliament - that was passed last Tuesday. Of course the Budget was passed down by Treasurer Morrison –

JOURNALIST:

Yes I understand that, Minister. As I said, you know this from being a small business owner operator yourself. There will be so many listening now and thinking you can say all of this, you can jump up and down and say that it can’t happen, it shouldn’t happen. We don’t like regulation, and we don’t like red tape, but this is one piece of regulation or legislation – you can call it whatever you want – but it would be something small business would be in favour of, getting bigger, larger companies who are holding small business to ransom to pay on time. 

MCCORMACK

Indeed and the first shot has been made across the bow. Certainly Coles have taken it on board. They have announced that they will be paying within 30 days. That’s really important. I went to the Coles supplier awards night last year at which 1100 small farm gate producers were acknowledged for the work that they do. They’re going to be paid on time, in 30 days. That’s really, really good. Coles have taken that initiative.

JOURNALIST:

And if they don’t, what can be done? Can there be some sort of penalties that small business can come back at them with?

MCCORMACK

Well that’s what we’re considering at the moment. I work very closely with Kate Carnell. I work very closely with her office. We’re certainly considering very, very seriously the report she’s handed down and the recommendations she’s made.

JOURNALIST

We know that poor cash flow is the primary reason for insolvency in this country. It impacts the economy by slowing down cash flow through all the supply chains. It limits growth, it inhibits jobs. And we know the Coalition is all about growth and jobs.

MCCORMACK

It is all about jobs and certainly that is the case. Even with the digital platforms we are encouraging, that’s also going to make sure that many small businesses can be paid not just in 30 days but they can get paid as they make the transaction, as they provide the good or service. There is a lot of eInvoicing going on at the moment and that will only enhance these quicker payment times which are as you mentioned, so necessary.

JOURNALIST

Michael, can I touch base with you in a couple of weeks’ time? I know that you’ve had the Budget and you’re on a road trip now, but surely as a Small Business Minister, being the number one issue for small businesses in this country, this has got to be high on your agenda? It’s got to be right up there on your radar.

MINISTER

It is, so let’s do that.

JOURNALIST

Brilliant - thank you. Small Business Minister Michael McCormack, enjoy the rest of the State.

MCCORMACK

Thanks Ben.