As Australians gird themselves for another energy brawl when state energy ministers meet later this month in Perth, wouldn’t it be wonderful if the Liberal and Labor states, and the Commonwealth, came together and agreed on a strategy to boost the nation’s economy.
With so many conflicting agendas that seems an impossible task. But is it?
I think there must be a good chance to get all the Australian governments to act together in the national interest and speed up the cash flow in the economy; an action which will almost certainly boost growth and employment at a time when lower interest rates no longer work.
And, as my readers know, as a nation we do that by first making large organisations (private and government) pay their bills in 30 or perhaps 20 days of an invoice being received (not approved).
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Those that fail to pay in 30 days where there is no genuine dispute cannot obtain government contracts, not just with the federal government but with all states. Government employees who prevent the payments will face penalties.
Plea to premiers
I would like to see the plan operate from January 1 but I think July 1 2020 is fairer. I make a personal plea to each state premier to act in the interests of the entire nation on this matter. And to get their attention I am going to list them in alphabetical order: Daniel Andrews (Victoria), Gladys Berejiklian (NSW), Will Hodgman (Tasmania), Mark McGowan (Western Australia), Steven Marshall (South Australia) and Annastacia Palaszczuk (Queensland).
I ask them to cast aside their political agendas and party politics and act in the interests of their states and the nation. Prime Minister Scott Morrison has already promised to act but so far has not delivered and faces one or two ministers with different agendas. And the Business Council of Australia tried to move in this direction but did not succeed. So separate action is required. And our largest builder CIMIC (still known to many as Leighton) is moving in the reverse direction, so it is urgent.
There are some great signs coming out of Canberra. This week finance minister Mathias Cormann and employment and small business minister Michaelia Cash combined to start tax reform with “A fairer treatment for tax compensation claims”.
Then today Cormann and Cash combined again to announce that from January 1 2020 , Commonwealth agencies will start paying e-invoices within five days or pay interest on any late payments.
The five day e-Invoicing payment policy will apply to contracts valued up to $1m, where a supplier and a government agency both use the internationally established framework for delivering and receiving invoices in an electronic form.
The states must ask that the Commonwealth not just deliver on 30 bill payment but protect honest small business taxpayers from an agenda driven Australian Tax Office. Just as important is to recognise that large enterprises defied will the parliament of Australia and have continued to issue contracts on a “take it-or-leave it” basis where the large group have widespread rights to vary or cancel the contract and the smaller enterprise has no such rights.
Under these “unfair” contacts there is no negotiation. My guess is that many millions of these contracts are plaguing the Australian corporate system and are a key part of the reason employment stagnates.
In the early days of Malcolm Turnbull’s administration parliament almost unanimously tried to block these dastardly practices undertaken by large enterprises, clearly recognising the harm they were inflicting on the nation. It was a rare instance of national unity from both major parties and the cross benchers. But the Pitt and Collins Street lawyers brigade gleefully found gaps in the legislation and told the boards of large corporates that they could safety ignore parliament. And they did.
ACCC boss Rod Sims has set out how to end big business’ defiance of parliament. His proposals must be adopted urgently to make the speed up of cash work to boost the economy. The ALP has announced it will support the Sims proposals. All that is required is for Morrison to act.
NAB’s plan
If ATO reform, fast payments and fair contract legislation are introduced then that opens the way for the next stage of the stimulation: expansion of cash flow-contract based bank and non-bank lending. The non-bank sector is ready to go. Among the big banks one more step is required. The leader of cash flow based big bank lending movement in Australia is NAB’s Anthony Healy, who was passed over as CEO for Ross McEwan who was previously chief executive of the Royal Bank of Scotland.
Will McEwan support and expand Healy’s cash flow smaller enterprise lending agenda?
It’s important for the nation that he does and that the Healy agenda be extended to all banks. New Xero and MYOB software enables banks to monitor cash flow and so lend on it – provided the government does its part with faster payments, a ban on unfair contracts that works and ATO reform.
These are matters that do not divide the parties. So we have a unique chance to stimulate the economy at a time when stimulation is badly needed, and lower interest depress rather than stimulate. And these stimulatory measures do not blow budgets. Indeed, the extra tax revenue created by extra business activity will generate tax, including GST, and help budgets.
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