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05 April 2017

2GB AFTERNOONS – INTERVIEW WITH BEN FORDHAM

E&EO…

Subject: ASBFEO Payment Times and Practices Inquiry

BEN FORDHAM: Kate Carnell is the Small Business and Family Enterprise Ombudsman and she’s on the line, Kate Carnell good afternoon.

KATE CARNELL: Hi Ben.

BEN FORDHAM: Thanks for talking to us again.  I like the fact that you’ve actually named and shamed some of these businesses.  How’s that gone down?  

KATE CARNELL: Probably not all that well in certain circumstances but quite seriously the businesses are all different in how they operate but what they’re not doing is they’re not paying people in a reasonable timeframe which in my view is 30 days – that’s what standard practice looks like – and in many cases, Mars has been totally upfront about it that they’re paying at 120 days and they are offering these sorts of loans and other big food and grocery wholesalers and manufacturers are doing the same, there are mining companies and transport companies, there’s construction companies that are just getting slower and slower and because they’re causing such a cash flow problem for their small operators they’re now entering into these arrangements of offering them loans. 

BEN FORDHAM: So let me get this straight, there’s a small supplier waiting 120 days to be paid money that’s owed to them that’s rightly theirs because they’ve already supplied the product and they’re struggling to keep afloat right?  They’re drowning and then the big business says to them – well they could say to them “we’ll pay your bill”, but instead they say to them “while you’re waiting and while you’re struggling we’ll loan you some money”.

KATE CARNELL: “We’ve got this great deal” and I understand some of them have got partnerships with banks and because they’re billion dollar global multinationals they get some pretty good rates.  So they’ve got this partnership and they’re “hey because we care” in inverted commas “we can offer you this loan at a good rate”.  Well the fact is they shouldn’t have to have the loan, they should just pay their bills. 

BEN FORDHAM: And I think the more we mention the company names as well.  A lot of these companies pitch themselves to families whether it be Kellogg with cereals or Fonterra with milk, Mars with chocolate products – it’s important to let people know that there are families who are being duded by these big businesses.

KATE CARNELL: Absolutely and I think Revlon’s in there too, there’s a chunk of these and it’s getting worse, it’s not ok and what these global companies are saying to us is “there’s no law against it, these decisions are made in head office, suck it up.  So unless there is regulation or legislation in the country we’ll make our decisions based upon the best outcomes for our company.”

BEN FORDHAM: Well I’m sure plenty of these small suppliers would love to hear some strong language from the Prime Minister on this.

KATE CARNELL: We will report in a couple of weeks Ben and we’ll be making these comments really strongly.  I started off with a view of a voluntary code was the way to go because I hate red tape, I hate Government regulation where you don’t need it but the further we’ve got into the inquiry the more feedback we’ve had from some of these big companies, the fact is a voluntary code is not going to work.  It hasn’t worked overseas in the countries that have tried it because these companies simply will just say “hey, we’ve made our decision in head office, there’s no law against it so we’re going to keep doing what we’re doing”.  So it really does require a bit of a line in the sand from Government here.

BEN FORDHAM: I know you’ll be staying on the case, we’ll talk to you soon.

KATE CARNELL: Thanks very much Ben.