Government commends Telstra, Rio Tinto for 'improving' payment terms

In a statement issued late last week, the Minister for Small and Family Business said that decisions taken by Telstra and Rio Tinto to improve their payment terms with suppliers, many of them small and family businesses, better align with the Morrison government’s impending legislation and community expectation.

Ms Michaelia Cash said that these decisions confirmed that the payment times reporting framework was the right policy to get best practice out of business.

“This legislation is all about transparency. So when big business react so quickly to community expectations in this instance, we know that they will be equally influenced by the payment times reporting framework,” she said.

Once implemented, the scheme will require Australian businesses with an annual turnover of $100 million or more to report how and when they pay their small business suppliers.

“Slow or deliberately delayed payment times have a significant impact on small business cash flow and viability. This will be a landmark reform which will encourage fairer and faster payment times for small businesses.”

According to Ms Cash, the government will introduce the payment times reporting framework legislation in the autumn sittings of Parliament.

ASBFEO warning  

Also last week, the ASBFEO warned big businesses using supply chain finance products that mine big data to manipulate small business suppliers, that this practice is being examined closely as part of its review into the matter.

“Recent reports of big businesses using supply chain finance platforms that use artificial intelligence to calculate the discount a supplier may be willing to accept are disturbing,” Ombudsman Kate Carnell said.

Ms Carnell’s statement came in response to reports in the The Australian detailing practices employed by Telstra and Rio Tinto to squeeze small business margins.

She called on small businesses and family enterprises who have had experience with supply chain financing to contribute to the Ombudsman’s review via inquiries@asbfeo.gov.au.