Australian Senator Pauline Hanson is urging the government to adopt mandatory, timely B2B payments for small suppliers, reports in The Australian said on Monday (Jan. 28). Hanson called upon both the Labor and Coalition to introduce legislation that would require businesses to pay their small business (SMB) suppliers within a certain period of time, pointing to SMBs’ “lack of cash flow,” resulting from delayed and late invoice payments.
Previous efforts from Small Business and Family Enterprise Ombudsman Kate Carnell have led to an inquiry into the issue of late B2B payments in the country, which encouraged the government to accelerate invoice processing to 10 days for bills under $1 million, starting in July. The initiative means government suppliers will be paid within 20 days, reports said.
However, Hanson said that Carnell and the government’s efforts have failed to tackle the late payments issue within the private sector.
“With more than 2 million small businesses across Australia, cash flow is critical,” she said. “The inquiry identified [that] businesses with a lack of cash flow reduced their ability to operate appropriately, and was the leading cause of business insolvency. Small and medium-sized businesses should not be used as a cheap source of finance through extended or late payment terms.”
The politician also slammed “voluntary codes of conduct” as “no longer acceptable,” and pointed to conglomerates in the mining, supermarket and transport sectors — especially international companies operating in Australia — as some of the worst offenders.
Hanson is calling for the adoption of a so-called One Nation policy that would require companies to pay invoices within 30 days of the end of the month “unless agreed at the outset of the contract,” and allocate enforcement responsibility to state-level administrators.
Last month, the Australian Subcontractors Association began rallying for legislation to protect suppliers and promote faster invoice payments, noting that thousands of larger contracting companies in the sector have shuttered their doors, leaving their suppliers stuck with unpaid invoices.