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ATA submission to ASBFEO payment times and practices inquiry

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07 February 2017

In its submission to the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) inquiry into payment times and practices, the ATA has called for a mandatory code to prohibit extended payment times being forced on small businesses

The trucking industry consists almost entirely of small businesses and is characterised by tight margins. 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, and often have little capacity to negotiate these extensions.

The submission recommends that the ASBFEO inquiry should endorse the development of a mandatory code to address payment terms issues faced by small trucking and other small businesses.

The proposed mandatory code, under Part IVB of the Competition and Consumer Act, should cover payment times, which should be no more than 30 days from the date an invoice is issued. 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.