Research aims to identify potential regulatory solutions to mitigate existing issues
Having earlier expressed concerns regarding payment time issues in the industry, Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell has launched a “self-initiated” inquiry to determine a pattern of commercial arrangement between big and small businesses and identify practical solutions to address concerns.
The Payment Times and Practices inquiry is inviting feedback from business owners and other industry stakeholders, and also seeking input from federal and state governments and other authorities to “weed out” patterns of behaviour that affect the viability of small businesses.
“One of the number one issues impacting small business productivity here in Australia is unfair payment practices – specifically late payments – with some research suggesting Australia lags well behind the rest of the world when it comes to paying invoices on time,” an ASBFEO statement says.
“Cash flow is king to small business; late payments can be the difference between success and insolvency so it’s vital these sorts of unfair payment practices are stamped-out to ensure small businesses can reach their full potential, and in doing so, continue to contribute substantially to the overall health of the national economy.
“Anecdotally, small businesses are reporting that some large businesses are taking longer than ever to pay their bills; this Inquiry aims to establish an accurate picture of the trends that have emerged in recent years surrounding the commercial arrangements between large and small businesses, as well as governments and small enterprises.
“The Inquiry will assess the impacts these trends are having and will identify practical solutions – including possible regulatory and market-based responses – that can be implemented quickly and effectively to help address identified problem areas.”
The inquiry is being conducted in partnership with state-based Small Business Commissioners in New South Wales, Victoria, South Australia and Western Australia, and will be carried out in association with the Council of Small Business Australia (COSBOA) and the Australian Institute of Credit Management (AICM).
Interested parties can provide their feedback through direct submissions, an online survey or by engaging in public consultations to be held early next year.
The Ombudsman plans to present its final report for government consideration towards to the end of March.
For more details, visit the ASBFEO website.