David and Goliath battle over small business mining payments
SMALL and family run businesses are being hit with a whopping $234.6 billion loss as a direct result of late payments - and the resource industry is one of the biggest offenders.
A recent report from the Australian Small Business and Family Enterprise Ombudsman found mining companies were the second worst industry for payment terms longer than 30 days, beaten only by the construction industry.
The report also said mining, oils and gas companies were the fourth worst industry in failing to meet contracted payment terms - behind construction, state and local government and the retail sector.
Minister for Employment and Small Business Shannon Fentiman said this week she had again written to mining companies, calling on them to provide fair payment terms to Queensland's 438,000 small businesses.
Ms Fentiman said the ASBFEO report had revealed little change since the first Payment Times Inquiry, in which half of respondents said 40 per cent of their invoices were paid late.
Ms Fentiman said lost revenue for small resource industry businesses could not be ignored.
"All businesses, big or small, have an obligation to support local communities where they and their employees work," she said.
"We need to hold large mining companies to account on fair payment terms for their small business suppliers."
This is the second time Ms Fetiman has contacted companies in the mining industry this year, urging them to ending the practice of stretching out payment terms to 90 days and beyond.
With mining companies, such as Peabody, BHP and Stanwell agreeing to fair payment terms of 30 days or less, Ms Fentiman encouraged other companies "to get on board and do the right thing".
Mackay MP Julieanne Gilbert congratulated the mining companies which had stepped forward and publicly committed to fair payment terms to local small businesses in the region.
"But many more have not and I am urging them to make a commitment to provide fair payment terms for small businesses," Ms Gilbert said.
"The impact of extended payment terms slows down the flow of cash in regional economies like Mackay, including limiting the capacity of all business but particularly small businesses to expand and employ new staff."
Ms Gilbert said the Queensland's Resource Industry Network had estimated reverting to 30-day payment terms could add 380 jobs to Mackay and Fitzroy regions alone.