TRANSCRIPT
Australian Small Business and Family Enterprise Ombudsman Bruce Billson interview with Selina Green.
ABC Radio SA South East
12 December 2022
Subject: energy costs, payment times
Selina Green
Lots of things are impacting businesses, particularly small businesses of which we have many across the South-east, not just the rising cost of power, but also have some delays in bills being paid. And there's an announcement of a review looking into that. Joining me this morning is Bruce Billson, who is the Australian Small Business and Family Enterprise Ombudsman. Good morning and thank you for your time.
Bruce Billson
Selina great to be with you and your listeners.
Selina Green
We’re talking this morning about power prices and the increase in those for businesses and I imagine this would be a huge cost for small businesses. Would there be, from what you're hearing coming through your office, very welcome relief hopefully on its way?
Bruce Billson
Power and energy costs are very challenging for many small businesses. I think Daniel's (Daniel Straude, Tatiara Business Association president) articulation was spot on. There's a couple of different dimensions to that. One is the nature, the pattern, of your energy use and solar and other things can assist. But, of course, rental premises that’s a conversation to be had with the landlord and there's only so much you can do.
The thing to do, though, is compare. There are some government-supported comparison websites Selina, that really are important because you do get penalised if you're a little complacent just leaving your energy arrangements as they may have been for some years. And you can drive a better bargain. And then, of course, there's some scope with, you know, improving technology.
But again, as Daniel said, you need the cash flow and be in a financial position to do that.
Selina Green
Is your office one avenue of support if businesses are having a bit of trouble with their energy provider, getting out of contracts or getting a better deal?
Bruce Billson
We've had a few contact us. In your state you've got an Energy and Water Ombudsman we would work closely with where there've been some unreasonable use of power by the energy providers. So that's one avenue. There's also, in the recent federal budget, some funding available too. We're very keen to see how that will roll out.
And then you would have seen the premiers and the Prime Minister coming together last week. Small business, in particular, is mentioned in those arrangements where there'll be a sharing of some financial assistance split between the states and the Commonwealth to try and take some of the edge off the price rises that are that are looming.
Selina Green
Speaking to Bruce Billson this morning, who is the Australian Small Business and Family Enterprise Ombudsman. Of course, when a small business operator goes to pay their power bills, it helps to have money in the bank and that all your invoices are paid up on time. This doesn't always happen in a timely manner, from what I understand. There is a bit of an issue of small businesses still waiting for bigger businesses to pay their invoices.
Bruce Billson
Selina, I'll be frank. The payment performance is really quite shabby. You would have thought as a small or family business supplier to a big business that that relationship would be valued and you'd be paid in a timely way.
But even the Business Council of Australia, with its payments code, urges its members to pay within 30 days. But what we're actually seeing through the Payments Reporting Register is that only about two-thirds of big business aspire to pay within 30 days. And then those that actually do, it's about a third and about a quarter, 23%, are waiting 120 days to be paid.
Now, you know, to quote John McEnroe after a bad line call, ‘You can't be serious’. I mean, that is just ridiculously long payment times. And it seems to be because some big businesses do it because they can. And we're just urging all businesses, particularly at this Christmas time, you know, be good, be a kindly customer to your small and family business suppliers and pay your bills in a timely way. It's really not too much to ask, and I'm not surprised the Government's taken the next step to say, look, we really need to have a look at this.
There's been, you know, industry leadership from the Business Council urging its members to pay within 30 days. There's transparency through the Payment Times Reporting Register. People were hopeful that would be enough, but, you know, it hasn't been enough. And now government’s contemplating what they need to do next.
Selina Green
Yeah, imagine the kind of hassle I would get if I was trying to pay all my bills that late. I don’t think somehow as individuals we'd get away with it.
Bruce Billson
That’s where it’s quite shabby. You know, if the roles were reversed, those businesses would be all over you. We know that. And even in my agency, I mean 40% of the matters that come to us now relate to payments. So, you know, it's becoming quite a challenge just to get paid for the work and the supply and the services that you've provided.
And you shouldn't be like that. Good businesses pay: they pay their tax, they pay their team correctly and they pay their suppliers on time in a proper way.
And, frankly, 30 days, that's not that flash. That's hardly shooting the lights out Selina. And we know during COVID, a lot of large businesses made a real effort and they were paying within four and five days.
So, you know, that's another opportunity. The Payment Register only recognises 20 days and better. Maybe we need some, you know, more finer calibration so that those doing it within a week or 10 days get acknowledged for that leadership. And we can get behind those businesses that are getting behind their small and family business suppliers.
Selina Green
As you say, there's a review looking into this now. Hopefully this will make something of a change, especially for those small businesses that are waiting longer periods for those invoices to be paid. Ombudsman, thank you very much for your time this morning.
Bruce Billson
Selina, have a super festive season. And better payment times, that’s on my Christmas list.
ENDS