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GREENSILL ACTS BUT WHERE IS THE GOVERNMENT?

February 10, 2020

Federal Labor welcomes the decision by Greensill to stop providing its supply chain financing services to companies that deliberately use it to push out 30-day payment time.
 
In a clear contrast, the Morrison Government has been completely absent on the issue of “reverse factoring” – a form of supply chain financing where small businesses pay a fee to be paid on time and which has been detrimental to many small businesses.
  
It is telling that at no stage has Senator Cash ever condemned or committed to action on reverse factoring and have dropped the ball on their announcement 18 months ago that they would require big business to have a 20-day payment time to small business in order to get government contracts. 
 
Greensill’s decision follows both Rio Tinto and Telstra’s decision to reduce its payment times to 20-days for suppliers and abandon the use of reverse factoring.
 
It also comes as the Small Business and Family Enterprise Ombudsman’s Supply Chain Finance position paper was released today, which is rightly critical of the inappropriate use of “reverse factoring” and provides a number of suggestions for the government to consider.

Small businesses require prompt payments to help manage cash flow and to grow, particularly when access to finance is tight. The economy does not benefit from this type of financialisation that only benefits needless intermediaries.

WE'LL PUT PEOPLE FIRST