The Australian Government should put in place a mandatory code to prohibit extended payment times being forced on small businesses, the Chair of the Australian Trucking Association, Noelene Watson, said today.

Mrs Watson was releasing the ATA submission to the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) inquiry into payment times and practices.

“The trucking industry consists almost entirely of small businesses and is characterised by tight margins,” Mrs Watson said.

“The vast majority of the costs incurred by small trucking businesses must be met before they can bill their customers. This includes wages or personal living costs, fuel, tyres, finance costs, registration and maintenance.

“As a result, small trucking businesses are vulnerable to adverse changes in their payment terms such as large customers imposing extended periods before they will pay an invoice.”

Mrs Watson said the ASBFEO inquiry should recommend the development of a mandatory code to address the payment terms faced by small trucking and other small businesses.

“A mandatory code for either the trucking industry or all small businesses under Part IVB of the Competition and Consumer Act should be designed to cover payment times, which should be no more than 30 days from the date an invoice is issued,” Mrs Watson said.

“The code would also need to include a prohibition on set offs and pay when paid arrangements, alternative dispute resolution, and special rules for recipient created tax invoices to prevent customers from delaying the creation of these invoices to avoid triggering the 30 day period.

“The ATA welcomes the ASBFEO’s endorsement of investigating this approach in its report on the effects of the RSRT’s payments order, and we encourage it to extend its recommendation to all small businesses.

“Alternatively, the development of standalone legislation modelled on the construction industry security of payment system could be investigated.

“The ASBFEO inquiry needs to result in solutions to extended payment times. Small trucking businesses should not have to provide extended credit to larger customers, risking their viability and jobs in the industry,” she said.

Read ATA submission to ASBFEO payment times and practices inquiry.

Media contact: Donna Jeremiah 02 6253 6900.