Business Payment Practices Bill

Members, the House is in committee on the Business Payment Practices Bill. When we were last debating this bill, we were debating Part 3, the debate on clauses 25 to 45. The question is that Part 3 stand part.

Thank you, Mr Chair, and my apologies, as I was somewhat thrown. I was thinking we hadn’t actually got to Part 3, but we are, and before I go into some of my questions on Part 3, I just have to reflect on the fact that the interlude of collegiality in an otherwise acrimonious urgency motion has now ended. There was pretty much strong support for the previous bill—and why wouldn’t there be, when it was sensible and the right thing to do?

This is not. This bill is poorly planned and badly designed, and it will fail to deliver what it’s intended to do. In fact, it’s unnecessary to deliver what it’s intended to do, and, for that reason, the National caucus will continue to oppose it.

Part 3 of this bill is, I think, emblematic of that inasmuch as it is punitive in its compliance, enforcement, and offences regime. So let’s just cover off what we are doing here: we are putting in place a requirement for a significant number of medium and large organisations to report on their payment practices, and their failure to do so, or to do so in the manner and at the time set out in the bill, could lead them to incur the wrath of the Ministry of Business, Innovation and Employment and to have some quite serious infringements ruled against them.

Now, we are opposed to this because there are other ways to do this. In fact, that was the advice that was given to the select committee, which was indeed that, firstly, the case for the problem hadn’t really been made and, secondly, this is not the solution. So to have an infringement regime for the failure to do something that most organisations simply do not need to do or could do in another way, or may inadvertently not realise it has to do, because the cycle of this actually means that organisations could—depending on their size and the nature of their debtor’s ledger, it could actually lead them to inadvertently not report at a time when they do.

Now, I note that there is a compliance notice regime, so the registrar, in its monitoring of compliance with the Act, has a choice to issue a compliance notice rather than go through an infringement regime, and I think that’s appropriate. But what’s not appropriate is that this be in place at all. So it would be helpful if the Minister could remind the committee, as we commence the balance of this review of the bill, why it’s felt that the information is needed to be collected in this way and by this law, when a simple $33 search of a credit agency register could deliver exactly the same result.

Mr Chair, thank you. Look, I feel like we are going over ground that we covered quite extensively the last time this bill was traversed, and the answer I provided to that same question we’ve received now is that a credit check in terms of a company’s financial viability is quite different to how quickly they pay their bills. Those are two separate things.

So while someone might be well solvent and have a great credit check, and you can find that out well and good for $33, what you cannot find out is how quickly that large company pays their bills. We know from good research provided by Xero that Xero has taken an index analysis and used really good data from the clients they have to demonstrate that big business, more often than not, uses smaller businesses as a credit facility, and what this bill does is hold that up to the light. It makes it transparent and it enables small-business owners to know who pays their bills on time.

I have heard firsthand from a number of small-business owners that they often are very close to missing a wage round or to missing paying a lease when they are required to do so because larger companies hold out to the very last minute in order to pay what is quite rightly due to those small-business owners. So I feel that this bill only goes part of the way in terms of balancing up that ledger to enable the small fish who swim within our economy to at least understand which of those big fish they should choose to do business with.

Thank you, Mr Chair. The Minister is correct in so far as a $33 cheque may not reveal the actual days to pay, because that isn’t part of the credit check, but what it would reveal very clearly is whether or not creditors have had to take action against that organisation. That is a much, much larger signal to the market about the reliability of the company that one might be doing business with.

The second thing to say is that the Minister’s answer suggests that there is a high level of correlation between the size of the organisation and their propensity to pay. This was examined by the Economic Development, Science and Innovation Committee, and the officials did not have data to confirm that size is not always—in fact, in my experience, it can be quite the opposite, that the larger firms are much better at paying. The one large organisation that actually has an occasionally poor track record of payment is the Crown. And if the Government wanted to ensure better cash-flow for small businesses dealing with the largest organisation in the country—that is, Crown entities—then perhaps it should put its weight behind increasing the expectations on the Crown to do a better job of paying its bills on time.

Minister, good to see you, thank you for your contribution. Clause 31, Part 3, deals with the infringement notices aspects and the related offenses in regard to those points. And, in particular, clause 33 is in regard to the terms and the nature of when these infringement notices will be issued. I guess my point around this is, in regards to the points made by the Hon Michael Woodhouse, in terms of the—while the intent of the bill is trying to target is, using the Minister’s language of the, “big fish”, how in which those infringement offences, in terms of the amounts that have been landed upon, have been determined. If the Minister could provide some clarity around that, and, in particular, dealing with the fact that, as, again, the Hon Michael Woodhouse has noted around the Crown in particular being one of the biggest examples of potentially a failure to meet obligations around payment on a timely basis. What, if any, forecasts have been undertaken in regards to how much infringement notices, or the value of those, will potentially be issued under this legislation, and whether any forecasting in that nature has been undertaken?

Thank you, Mr Chair. I was just looking at here, where it talks about—just following on from what my colleague Simon Watts was saying before—around infringement notices, and looking for a bit more detail around that and the fees and seeing where that is set out. Noting in clause 37, there, it says the fees “must be paid into a Crown … Account.”

I was wondering whether the Minister had any more details around that; around when they must be paid. What is the time period? What is the amount of the fees? It would be quite good practice if, in here—and this is something that the Minister and the officials may want to consider as in this part here, “Payment of infringement fees”—you could then connect that up to the Schedule that listed what the fees are and what the payment dates are and what penalties may be applied if those times are not met.

The question is that the Minister’s amendments to Part 3 set out on Supplementary Order Paper 363 be agreed to.