The trucking industry strongly welcomes proposed Labor amendments to the Payment Times Reporting Scheme, which would introduce penalties for big business who continue to pay their bills late.
That’s the message from Australian Trucking Association (ATA) Chair David Smith who was responding to the Labor Party’s proposed changes to the Payment Times Reporting Bill 2020, currently under debate in the Senate.
The proposed legislation by the Coalition Government would establish a new Payment Times Reporting Scheme which will compel big companies to disclose how quickly they pay small businesses.
But Labor is arguing that the proposed reform is full of holes and doesn’t go far enough in addressing an issue all too prevalent in the trucking industry.
Labor wants the government to further strengthen the reforms by introducing a fail-safe that would raise the possibility of financial penalties if, after three years’ reporting under the framework, big businesses still aren’t paying smaller operators within 30 days.
“The ATA has been calling for the new Payment Times Reporting Scheme to be backed by stronger action to deliver fair payment times for the trucking industry,” says David Smith.
“Without amendments, the new scheme would try to improve payment times by transparently reporting the payment practices of big business.
“In the UK, a similar approach reduced the proportion of big business paying bills late from 30 per cent to 28 per cent over two years.
“The approach is welcome, but not strong enough. Transparency and monitoring simply does not compel the worst offenders to improve their payment practices.”
Smith said other countries have proven that the 30-day payment terms must be backed with penalties, or the worst offenders simply do not change their payment practices.
“Labor’s proposed payment times failsafe would see big businesses face fines for not paying small business on time, providing a strong incentive to make the reporting scheme actually deliver results.
“The ATA strongly backs the failsafe and urges Parliament to pass both the Labor amendment and the Coalition’s proposed reporting scheme.
“We welcome the commitment of both sides of politics to reducing unfair payment times.”
Extended payment times are a critical issue for the trucking industry, adds Smith.
“Trucking is a small and family business industry, working on tight margins and with little power in dealing with large businesses.”
“Most of the costs incurred by trucking businesses must be met before they can bill their customers. These include wages or personal living costs, fuel, tyres, insurance, finance costs, registration and maintenance.”