If you believe what Canberra is telling us, smaller transport operators now have legislation in place designed to tighten the screws on slow industry payers.
The Payment Reporting Scheme came into play from January 1, which means large businesses, and large government enterprises, need to report their small business payment terms and times on a public register.
The Government says it will increase transparency around ‘payment performance’, help small businesses decide who to do business with, and create incentives for improved payment times and practices.
There are also penalties if those larger business fail to comply with the regulator’s requirements, ranging from $13,320 for lower end contraventions, to up to 0.2% of the entity’s total income in the relevant income year for breaches such as failing to provide the appointed auditor with all reasonable facilities and assistance necessary for the auditor’s duties.
But those fines won’t be enforced in the first year – to give companies the chance to come to grips with the new legislation – and the scheme doesn’t do anything to mandate faster payment times, which the road transport industry has been crying out for.
Shadow Minister for Small and Family Business Brendan O’Connor told Big Rigs that the legislation is “weak” and riddled with deficiencies.
“It continues the trend of the Morrison government failing to improve payment times for small businesses,” said O’Connor.
“Labor wants to see small businesses, including those in the transport industry, treated fairly and paid on time.
“Labor has consistently made the case that prompt payments from large businesses to their suppliers are crucial to small business cash-flow. This has never been more important as businesses face a global pandemic and a recession.”
While Labor supported the Payment Times Reporting Scheme in principle, it consistently noted that the self-regulation regime lacked any teeth and was unlikely to speed up payment times to small businesses, particularly for the transport industry.
Labor moved a ‘failsafe mechanism’ amendment to the legislation, which would have ensured big businesses lower their payment times to under 30 days.
This amendment received strong endorsement from the trucking industry and the small business ombudsman, but was opposed by the Government, including the Prime Minister and the Small Business Minister, added O’Connor.
TWU National Secretary Michael Kaine told Big Rigs that the Federal Government has brought in a law which will neither ensure that owner-drivers and small operators get paid on time, nor will it hold those ultimately responsible for the financial squeeze on transport to account.
“The Payment Time Reporting Scheme is an attempt by the Federal Government to engage in an elaborate charade to make it look like it is helping small businesses, including trucking companies,” said Kaine.
“But the scheme fails to actually regulate payment times – instead it merely aims to ‘expose’ those who pay late. The scheme also won’t adequately hold to account the vast majority of the wealthy companies at the top which through their low cost and late payment contracts create the scenario whereby small transport operators throughout their supply chain are made to wait up to and even over 120 days for payment.
“As companies at the top they won’t have to state which small operators they ultimately pay throughout their supply chain.”
Kaine said the law is another failure on the part of the Morrison Government to help the trucking industry which is in urgent need of fundamental reform.
He also believes that the ideology of Small Business Ombudsman Kate Carnell is at the heart of the law’s failure.
“She has pushed for meaningless voluntary codes and light-touch regulation. When small trucking companies are forced to take on the might of huge retailers, manufacturers and oil companies they need robust regulation of these powerful companies at the top, not flimsy legislation threatening exposure of middle men,” said Kaine.
“The result of this failure to regulate adequately is serious: hundreds of trucking companies become insolvent each year while truck drivers and other road users pay with their lives through fatal truck crashes.”