Australian trucking industry backs proposed payment times failsafe mechanism

3 MinutesBy NZ Trucking magazineSeptember 8, 2020

The Australian trucking industry strongly welcome proposed Labor amendments to the Payment Times Reporting Scheme, which would introduce penalties for big business who continue to pay their bills late, Australian Trucking Association chair David Smith said. 

Smith was responding to the Labor Party‘s proposed amendments to the Payment Times Reporting Bill 2020, currently under debate in the Senate. The proposed legislation by the Coalition Government would establish a new Payment Times Reporting Scheme. 

“The ATA has been calling for the new Payment Times Reporting Scheme to be backed by stronger action to deliver fair payment times for the trucking industry,” Smith said.  

“Without amendments, the new scheme would try to improve payment times by transparently reporting the payment practices of big business. 

“In the UK, a similar approach reduced the proportion of big business paying bills late from 30 percent to 28 percent over two years. 

“The approach is welcome, but not strong enough. Transparency and monitoring simply does not compel the worst offenders to improve their payment practices.” 

The Labor Party has proposed amendments to establish a failsafe mechanism. If the reporting scheme does not broadly reduce payment times to small businesses to 30 days or less, the failsafe mechanism would be triggered. 

“International experience is that 30-day payment terms must be backed with penalties, or the worst offenders simply do not change their payment practices,” Smith said. 

“Labor‘s proposed payment times failsafe would see big businesses face fines for not paying small business on time, providing a strong incentive to make the reporting scheme actually deliver results. 

“The ATA strongly backs the failsafe and urges Parliament to pass both the Labor amendment and the Coalition‘s proposed reporting scheme. 

“We welcome the commitment of both sides of politics to reducing unfair payment times.” 

Extended payment times are a critical issue for the trucking industry. 

“Trucking is a small and family business industry, working on tight margins and with little power in dealing with large businesses,” Smith said. 

“Most of the costs incurred by 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.”