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The BCA’s supplier payment code marks another win for small business

A new code that commits firms to paying small suppliers within 30 days is a sign we’re getting serious about creating jobs.

The BCA move had its beginning withRobert Gottliebsen asking Telstra CEO Andy Penn if he would pay small suppliers in 30 days at a breakfast earlier this year. (David Geraghty/The Australian.)
The BCA move had its beginning withRobert Gottliebsen asking Telstra CEO Andy Penn if he would pay small suppliers in 30 days at a breakfast earlier this year. (David Geraghty/The Australian.)

Most of Australia’s big corporations have at last woken up to the fact that, collectively, they are no longer our largest employers and the community and the Parliament are demanding they act as good community citizens to boost national prosperity. And, if they don’t, there will be punishment, not always logically delivered, as the banks have just discovered.

In this context, May 29, 2017 was a historic day because the Business Council of Australia changed course and introduced an Australian Suppliers Payment code whereby signatory companies agree to pay eligible Australian small business suppliers on-time and within 30 days of receiving a correct invoice. They also agreed to help suppliers implement new technologies and practices to speed up invoicing.

Full praise to the Business Council, it’s an exciting move for the nation because slow payments really make it tough for small business.

Strangely, the BCA move had its beginning when at a breakfast earlier this year I asked Telstra CEO Andy Penn if he would pay small suppliers in 30 days. He stunned me by agreeing but said it would take six months to implement the systems required to honour the promise. I had absolutely no problem with that delay because large organisations take time to change direction.

Indeed, a warning all CEO’s who sign up to the code: it will usually require them to undertake a systems and a middle management cultural change. Currently, middle and higher mangers often play games over invoice approvals to delay payment. Any CEO who signs up and has not stopped these practices will be given a full blast by me and I have no doubt they will be called before the parliament.

In the list of companies that have agreed I see the four big banks. NAB was one of the first to email me to say me how proud they were to be one of the first to sign on.

All who’ve signed on deserve full praise for acting in both the national and shareholder interests.

There is one clear omission. Our largest retailers, including Coles and Woolworths, have not been included on the BCA list.

The message from the major retailers is that they are already on 14 days and do not want to have their message confused by the BCA.

There is clearly a split in the ranks.

I note that in the budget, Treasurer Scott Morrison promised 30 day government payments, which shows he understands the overall game.

If either the BCA or the major retailers’ plans do not work, prepare for legislation. One potential snag is that while unresolved disputes go to state small business commissioners there is no requirement to fully co-operate with the commissioners in mediation.

That’s weak and if badly managed companies play silly games in this area legislation will follow. Meanwhile Australia is moving in the right direction to stimulate employment — unfair contracts, 30 day supplier payments, and the franchise legislation (unlike the BCA, the franchise council still lives in the past). The big gap is the Australian Taxation Office. I will keep working on that.

Robert Gottliebsen
Robert GottliebsenBusiness Columnist

Robert Gottliebsen has spent more than 50 years writing and commentating about business and investment in Australia. He has won the Walkley award and Australian Journalist of the Year award. He has a place in the Australian Media Hall of Fame and in 2018 was awarded a Lifetime achievement award by the Melbourne Press Club. He received an Order of Australia Medal in 2018 for services to journalism and educational governance. He is a regular commentator for The Australian.

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Original URL: https://www.theaustralian.com.au/business/opinion/robert-gottliebsen/the-bcas-supplier-payment-code-marks-another-win-for-small-business/news-story/ecdb2bdeb18fb826335498331b5bc807