COVID-19 Updates

Improve Payment Terms and Stop Using Owner-Operators as ‘Cheap Finance’

The NSW Small Business Commissioner has recently released the Small Business Shorter Payment Terms Policy, which requires companies entering into contracts with the NSW Government to pay their subcontractors within 20 business days following the receipt of invoice. This applies to contracts from 1 July 2021 with a value of $7.5 million or more.

Although this is a welcome change, it only applies to a small number of owner-operators, with large numbers of operators struggling to pay their own bills.

Delayed payments or non-payments are the major contributors to business closure. Large companies are effectively using sub-contractors as a way to finance their operations by not paying them on time.

NatRoad continues to lobby the federal government to make 30-day payments a maximum time within which payment to a small business must be made. A national law to that effect would help end the uncertainty and inconsistency of payment times for transport small businesses.

Many companies are using COVID-19 as an excuse to push payment times out further than 30 days.  In the face of this trend, it is hoped that the changes in NSW point to a trend that can help reduce the uncertainty and inconsistency of payment times for small transport owner-operators. But more needs to be done and similar changes should be introduced nationally and made law rather than form part of a government code.  

 Better support and protection are needed for road transport operators to keep them on the road during these turbulent times.