'Disgraceful': Call for action on 90-day pay terms
GLADSTONE'S political leaders are calling for action on large companies stretching invoice payment terms to 90 days, making it impossible for small businesses to compete in the resource sector.
Member for Gladstone Glenn Butcher has called on Member for Flynn Ken O'Dowd to stand up for the region's business owners and put an end to the practice used by major miners.
Mr Butcher referenced an article in The Observer on Tuesday about the issue and said it was "disgraceful" that Gladstone business Corfield's Electrical is downsizing because it is unable to cope with the extended payment terms.
"In 2017 a report by the office of the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) found almost half of all small businesses reported that more than 40 per cent of their invoices were paid late," he said.
"And that these late payments were mainly from large and multinational businesses.
"Late payment slows down the flow of cash in the Gladstone economy which can have knock-on effects, including limiting the capacity of businesses to expand and employ new staff.
"Ultimately, 90-day extended payment terms are costing our economy and robbing the region of job growth."
Mr Butcher said the report recommended the Australian Government introduce legislation which sets a maximum payment time for business to business transaction.
He said the Turnbull Government was to make note of the recommendation, "but to date, no action has been taken".
Mr O'Dowd said he is working with Minister for Small and Family Business Craig Laundy on legislation to protect contractors from being left high and dry.
"Hard working contractors who commit significant resources and funds to large construction projects only to be stung by companies that fall into administration without receiving compensation for their toil and outlays," Mr O'Dowd said.
He said the Federal Government was "leading the way in delivering faster payments and reducing red tape and regulation to enhance competition".
Gladstone Engineering Alliance brought the extended payment term issue to light last week when they encouraged businesses to make a submission to a Federal Government inquiry into how the mining industry could support regions.