The moves in parliament to amend the Payment Times Reporting Scheme, which would introduce penalties for big business who continue to pay their bills late, could help in the task of moving trucking into the 21st century.
If there is one thing which characterises the culture within the trucking industry, it is the over long payment periods many in the industry have to deal with. This is a hangover from the times when most businesses worked on personal relationships and a sealed a deal with a handshake.
There is a tradition among the big boys of bullying the small fry in the industry. It is such a free-for-all that any organisation with scale and a bit of muscle, almost inevitably, ends up pushing its suppliers into accepting things like 90 day payment terms.
Anyone with a basic grasp on economics knows that 90 day payment terms put an unbearable strain on small businesses, who are expected to pay their bills on a much shorter timeframe as they are often buying using the large corporations where they buy things like fuel and tyres. Wages are also due on a shorter term basis. Fuel, tyres and wages are any transport company’s main costs.
The amendments put forward by Labor to the proposed bill are intended to toughen up the relatively weak payment times legislation, adding a layer of penalties for any customer which consistently pays bills well over the 30 day limit.
David Smith, Australian Trucking Association Chair, has come out in full support of the improved penalty process proposed.
“International experience is that 30 day payment terms must be backed with penalties, or the worst offenders simply do not change their payment practices,” said David. “Labor’s proposed payment times failsafe would see big businesses face fines for not paying small business on time, providing a strong incentive to make the reporting scheme actually deliver results. The ATA strongly backs the failsafe and urges Parliament to pass both them Labor amendment and the Coalition’s proposed reporting scheme.”
We need more of this attitude, in order to drag the trucking industry and its customer base, especially the big boys, out of old 20th century thinking and get them on the right page, moving trucking into the 21st century.