Australia’s two separate competition and market agencies, the Competition & Consumer Commission (ACCC) and the Securities & Investment Commission (ASIC), have been ordered to work together to end the scourge of late payments.
Treasury Secretary Philip Gaetjens has reportedly challenged ACCC and ASIC governance to develop comprehensive schemes facilitating payment orders undertaken by small to medium enterprises (SMEs).
Governing Australia’s biggest business incumbents, the ACCC and ASIC have been tasked with eliminating ‘unfair business practices’, which have been used to delay payments to smaller suppliers, impacting SME cash-flows and growth projections.
Treasury demands will likely see the ACCC and ASIC undertake a review of large-scale businesses contractual terms on payment of suppliers.
Developing an effective payment scheme for SMEs could see Australia’s biggest firms adopt separate invoicing measures to prioritise early payment to smaller businesses.
ACCC Chairman Rod Sims stated that his department was aware of the urgency required on late SME payments.
He explained that the ACCC had worked with big businesses on the matter, with the majority of companies resolving their payment structures voluntarily by ‘changing practices in their volition’.
“The ACCC will liaise with ASIC in assessing any allegations of conduct around extended payment terms involving the offer of supply chain financing,” said Sims.
Australia’s Treasury is the latest national regulator to set about punishing large enterprises for late payments which impact SMEs.
It has followed the UK Treasury in developing SME payment protections – a policy requisite developed by former UK Chancellor of the Exchequer Philip Hammond.
Nevertheless, the UK government’s policies have been deemed insufficient. Despite publicly naming the UK’s worst offenders, UK finance reported a 22% increase in 2019 to the number of SMEs taking legal action over late payments.
