Minimum 30-day payment terms must be mandatory
Minimum 30-day payment terms are a must for the road transport industry, which is characterised by tight margins, according to the National Road Transport Association.
“Australian Small Business and Family Enterprise Ombudsman’s review of payment times can help by providing SMEs better and easier access to capital helping them sustain their business, which is why NatRoad is supportive of the review,” Warren Clark, Chief Executive Officer of the National Road Transport Association said.
“Whilst we welcome the recent announcement, to measure the effects of late or extended payment practices on the cash flow of small businesses and family enterprises in Australia, more must be done.
“We believe that the Ombudsman’s inquiry will show that payment times in the road transport industry are too long. The introduction of an industry code that includes payment terms would significantly improve the viability of small trucking businesses.
“Our members have told us that lengthy payment terms increase financial and administration costs, reduce the potential for growth and investment, and ultimately add to business uncertainty and failure.
“Another inquiry is unlikely to solve the problem. It is already evident from the prior ASBFEO inquiries that the industry is extremely vulnerable to extended payment time exploitation. So NatRoad has asked and will continue to press for the Commonwealth Government to introduce a mandated code covering payment terms for trucking businesses to include payment times, a prohibition on set-offs and pay when paid arrangements similar to the security of payments legislation that operates in the building and construction industry.
“NatRoad will continue to support the work of the Australian Small Business and Family Enterprise Ombudsman in the current inquiry whilst maintaining that greater intervention by Government is needed. Ensuring business owners have good cash-flow will help grow and strengthen the whole economy,” he concluded.