ATA calls for new payment term rules to be extended to cover all big businesses

2 MinutesBy NZ Trucking magazineNovember 11, 2019

The Australian Government should extend its new payment term rules to all big businesses, says Australian Trucking Association CEO Ben Maguire. 

Maguire said the ATA welcomed the government announcement that all contractors who bill the government electronically will be able to claim interest if they are not paid within five working days. 

“It‘s a great announcement, but it doesn‘t go far enough. The government should require that all customers to pay trucking companies within five working days, if using e-invoicing, or 20 days maximum,” Maguire said. 

“Most of the costs incurred by small trucking businesses must be met before they can bill their customers. These include wages or personal living costs, fuel, tyres, insurance, finance costs, registration and maintenance. 

“This means small businesses are extremely vulnerable to adverse changes in their payment terms, and often have little capacity to negotiate them with large customers. These new standards will lift the standards for paying businesses on time,” he said. 

The changes will apply to all electronic invoices below $1 million and will start from 1 January 2020, initially with the Department of Finance and Services Australia. A maximum 20-day payment term will continue to apply in instances where e-invoicing is not used, following a move from the government to cut payment terms for all government invoices below $1 million from 30 days to 20 days from 1 July earlier this year. 

Maguire said the ATA would seek an urgent meeting with the Department of Infrastructure, Transport, Cities and Regional Development on the implementation of this new standard for the government‘s infrastructure program. 

“Commonwealth-funded infrastructure projects must reflect these new payment term standards, and Australian Government funding agreements with states and territories should implement these new payment terms for major road projects,” Maguire said.