The Hon Michael McCormack MP, Minister for Small Business, said that his office is preparing a reply to the payment times inquiry, which seeks to reduce the time spent by SMEs chasing down overdue invoices – a longstanding issue that if left unattended might hinder Australia’s small-business success.
Following are extracts from Minister McCormack’s recent address at the Sydney Institute on the importance of small business to the Australian economy:
“Every morning, almost one in two Australians goes to work in a small business. Every morning, the wages of 5.6 million of us are paid and our communities are served by 3.2 million small businesses.
“So every time Australia’s economic indicators show more people in work, more growth in our economy or even more choice on our supermarket shelves, the sector doing the heavy lifting is always the same: Small business.
“Australia is a story of small business success. So tonight I am going to share with you that story of hard work and determination. That story of new ideas and ventures. That story of economic success. Tonight, I will share with you the story of small business and why the Liberals-Nationals in Government see small business as sacrosanct.
“And why it’s in our values to always have your back. For the Government, it starts with injecting confidence. For a business to pursue a new idea, to hire another Australian or to give someone else a go takes courage. It’s the belief that the service you offer will be something consumers want. The belief that the person you hire will help your business grow and that your work can fund the wage of that person. The belief that the economy is in need of more people like you pursuing their idea.
“So, as a Government, it’s our role to respect that. Our role is to respect you. It’s our role to applaud those Australians for whom the challenge of starting a new small business is equally entwined with the excitement of opportunity. And there is a lot of excitement in starting a new small business.
“And it’s our job, the Federal Government’s job, to make your job easier. When we can do that successfully, small businesspeople create jobs. Wages can grow in the economy. So too a modernising workplace and marketplace can keep small business front and centre. But the challenge of this change and adaptation is vast. So small business needs people who share its passion, who understand its struggles and who want to champion its success.”
Payment times
“Payment times is an issue that is raised time and time again right across Australia.
“Over the past six months, analysis by Xero shows 65 per cent of SMEs had invoices overdue by more than 30 days. And unsurprisingly, SMEs which experience late payments are three times more likely to go out of business than those which receive payment within 30 days.
“I am reaching the final stages of preparing a response to the Australian Small Business and Family Enterprise Ombudsman’s payment times inquiry. And I can promise you I am not going to stand by while big business dictate unrealistic payment terms and times to small business on a take it or leave it basis. To me, this constitutes a breach of our unfair contract legislation.
“The Federal Government is already a model small-business payer and is attempting to influence big business into doing the same. Project bank accounts, mirrored payment terms on Government jobs and extending swift payment expectations to Government agencies are high on my agenda.
“I commend the Business Council of Australia for implementing its voluntary payment code, which sets the expectation of big business’ payment to small business within 30 days. It’s a good start.
“However, don’t for a second think I have discounted or ruled out legislating payment terms. If behavior does not change, and the scant regard for small business isn’t alleviated, all options will be on the table. But the voluntary code is a good start and I will be monitoring it very closely.”
Inside Small Business
