Victorian small business minister Philip Dalidakis “working tirelessly” to stamp out late payments to SMEs

Victorian small business minister Philip Dalidakis says he is working “tirelessly” to address the growing problem of late payments to SMEs and want to see a voluntary code implemented to ensure SMEs have their invoices paid within 30 days.

Speaking at the Telstra Business Awards 25th birthday celebrations in Melbourne yesterday, Dalidakis said he has attempted to worth with the federal government to implement such a code.

“I have worked tirelessly with the federal government to no avail to have introduced a national scheme that’s modelled on the UK’s code of payments platform,” Dalidakis said.

Dalidakis highlighted any code would be voluntary, much like the one established in the UK. It would allow businesses to sign up to an agreement to pay small business owners within 30 days of the receipt of their invoice.

In early 2016, the Council of Small Business Australia called for implementation of a similar code, stating it wants to change the culture around late payments.

Dalidakis reflected on his time running a small business for two-and-a-half years before entering Parliament, saying he knows how hard it is when bills are not paid on time.

“What we’ve actually seen is businesses using small business providers as, effectively, their cashflow. As a former small business owner where I had invoices take 60-90 days to be paid, I genuinely appreciate how challenging this is,” he said.

“The federal government tried to usurp me by going out and saying they wanted to collect data around this. We don’t need to collect data on this, we just need to act.”

If Dalidakis cannot forge an agreement with the federal government, he pledged to look at introducing a voluntary payment code within Victoria, saying the state must “set the benchmarks” of what SMEs can expect from corporate partners.

Late payments a key focus for SME community

This call to arms comes at a time of increasing focus on payment times, with the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell currently undertaking an investigation into SME payment times.

Speaking to SmartCompany at the announcement of the inquiry, Carnell said cashflow issues for SMEs “involve more than just a lack of customers”.

“No one we’ve spoken to thinks it’s reasonable for small businesses to be used like banks for larger businesses, so on that basis, we have a lot of support for addressing this issue,” she said at the time.

“If we make this an issue we’ll hopefully shame some of the big players into fixing up their behaviour.”

Preliminary results from the inquiry were released on Wednesday,  which revealed almost 50% of SMEs experience late payments on half of the bills owed to them.

Additionally, 60% of businesses consulted said they believe they are seeing an increase in a number of late payments over the past 12 months.

Many business owners also noted the impact delayed payments had on their mental health, inducing stress and anxiety over unpaid invoices.

“Based on the inquiry survey data, it’s becoming quite clear that big businesses—particularly large multinationals—are exploiting the power imbalance that exists in their relationship with small business people who simply aren’t in a position to argue for better payment terms,” Carnell’s office said in a statement.

Later in the Telstra Business Awards event on Wednesday, during a panel discussion with small business owners, business commentator Robert Gottliebsen implored Telstra chief executive Andy Penn to ensure the telecommunications giant paid all of its small business accounts within 30 days.

“Okay, done,” Penn said.

“It’s an easy thing to do Rob. We pay on a weekly cycle so most of our payments go out in 30 days, but it would not be difficult for me to implement this policy.”

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