none

GOVERNMENT CAN LEAD BY EXAMPLE IN PROMPT PAYMENT

13-04-2017
by 
in 

Even with the government’s recent success in improving tax conditions for Australian companies turning over $50 million or less, smaller businesses still face many challenges in today’s Australian economy. And one of the biggest of these is maintaining cashflow.

Big business, it seems isn’t playing fair. And the (admittedly optimistic) 30-day terms on which we all base our business plans are a distant memory, stretching to 60, 90, and even 120 days as a matter of course.

Little wonder, then, that the Federal Small Business Ombudsman Kate Carnell has accused Australia’s top businesses of treating their smaller counterparts as sources of low-cost (or free) credit.

The accusations come as a result of a survey, carried out by the ombudsman’s office, which took submissions from 3000 small businesses.

Carnell has proposed a number of measures to rectify the situation. These range from federal legislation to ensure compliance with 30-day terms to mandating the 100 top businesses in the country to report twice a year on their payment times.

Sadly, though, she is unlikely to find too many supporters in a Government that is committed to removing red tape, rather than increasing it.

However, one measure that does deserve support is her call for the Australian Government to follow the example set by the US Government and reduce its own settlement terms to 15 days.

A recent review by Harvard Business School found that the policy change had created 75,000 jobs and delivered $6 billion into US workers' pay packets.

What’s more, the US Government’s example set off a wave of conscience among blue chip companies, which rushed to sign up to President Obama’s SupplierPay Initiative, committing themselves to reduce their payment terms to small business to match those of the government.

Leading by example? Perhaps that’s a lesson for governments worldwide.

Related news & editorials

  1. 23.04.2018
    23.04.2018
    by      In
    Depending on your age and where you were brought up, chances are that you might have made a bit of pocket money as a kid from foraging and redeeming glass bottles.
    This early form of recycling – long before local councils got in on the act – funded many a bag of lollies at the convenience store.... Read More
  2. Laurence Marchini
    26.02.2018
    26.02.2018
    by      In
    I like a bargain as much as the next person. But it can be all too easy to be swayed by an appealing price tag without taking true value into account. And I have been reminded of this several times this year alone.
    Take, for example, consumer electronics. When my son asked if he could have a new... Read More
  3. Laurence Marchini
    21.12.2017
    21.12.2017
    by      In
    The recent cabinet reshuffle within the Turnbull Government has left a few people (myself included) scratching their heads. What ever happened to “Industry”?
    Granted, there are extenuating circumstances: the withdrawal of Senator Arthur Sinodinos from the cabinet to concentrate on his recuperation... Read More
  4. Laurence MarchiniLEVELLING THE PLAYING FIELD FOR AUSTRALIAN STEEL  Last week’s long awaited report from the Senate Economics References Committee into the Australian steel industry has much to say about the problems facing the industry. But does it have any practical strategies that the current Government is likely to implement?  The report includes no fewer than 28 recommendations, but an alarming number of these are that the Government should reconsider its responses to the report from the Joint Standing
    06.12.2017
    06.12.2017
    by      In
    Last week’s long awaited report from the Senate Economics References Committee into the Australian steel industry has much to say about the problems facing the industry. But does it have any practical strategies that the current Government is likely to implement?
    The report includes no fewer than... Read More