Read all the latest news from Brendan O'Connor MP
Read all the latest news from Brendan O'Connor MP
In reports today, supply chain finance company Greensill and former Liberal Party deputy leader Julie Bishop admit that small businesses are being fined to be paid on time, and yet silence remains the preferred response from the Morrison Government.
It is reported that Lex Greensill and Julie Bishop commented at the Davos World Economic Forum that they are ‘weighing up whether and how to refuse service to clients who "bully" small businesses by charging them just to get their invoices paid on time’.
To date, Minister Cash has been silent on the issue and yet the Prime Minister gave Lex Greensill an hour of his time to personally spruik his services. A strong stance and leadership is needed on this issue.
According to today’s reports, a payday lending-type product for workers – which was offered to the public service in the meeting with the Prime Minister - will also be rolled out soon.
Small businesses should not be an afterthought, and without the Morrison Government standing up for them and taking action on the issue, these words will ring hollow.
Making small businesses pay a fee to be paid on time is unconscionable. The ‘reverse factoring’ product Greensill offers allows big companies to extend payment times, with small businesses later offered a third-party financier like Greensill to pay the invoice on time but with a fee. This means small businesses aren’t receiving full reimbursement.
Labor is part of a chorus of voices concerned about certain supply chain finance arrangements, including ratings agencies, international audit firms, the Australian Accounting Standards Board, and the Australian Small Business and Family Enterprise Ombudsman Kate Carnell who is currently running an inquiry in supply chain finance.
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 middlemen.