Armed with early results, ASBFEO sprays big business and government
Small businesses are reporting worsening exploitation on payments from the biggest corporations and from some governments, the Australian Small Business and Family Enterprise Ombudsman’s (ASBFEO’s) office states.
The ombudsman, Kate Carnell, and her office are a driving force behind the Payment Times and Practices Inquiry.
Early results are said to have found:
- almost 50 per cent of small businesses experience late payments on at least half of the bills owed to them
- the practice of late payments is getting worse, with around 60 per cent of small businesses reporting an increase in the trend over the past 12 months
- almost 70 per cent report that the practice has reduced business profitability, “with many business owners acknowledging it has a serious impact on their mental health given the added stress and anxiety late payments – and the associated cash-flow problems – can trigger”.
“Based on the Inquiry survey data, it’s becoming quite clear that big businesses – particularly large multi-nationals – are exploiting the power imbalance that exists in their relationship with small business people who simply aren’t in a position to argue for better payment terms – or to demand immediate payment – for fear of destroying their relationship with the larger company,” the ombudsman’s office states.
“The Inquiry has also found the practice is not limited to one sector, with the impact of extended and late payments rippling through the entire economy.”
It has already received an Australian Trucking Association (ATA) submission advocating either a mandatory 30-day payment rule or a “standalone legislation” based on the Building and Construction Industry Security of Payment Act.
It is understood a number of trucking firms have submissions in and that the bulk of submissions from all interested parties have been made under condition of anonymity.
The inquiry is being run in partnership with state-based Small Business Commissioners (SBCs), the Council of Small Business Australia (COSBOA), the Australian Institute of Credit Management (AICM) and the Institute of Public Accountants (IPA).