A vocal advocate for the little people is demanding resource industry leaders to start pledging they will pay for services in a timely manner.
Queensland Minister for Employment and Small Business Shannon Fentiman wants mining companies to provide fair payment terms to the state’s 438,000 small businesses that service the sector.
“Last year, I wrote to companies in the mining industry urging them to do the right thing and treat the hundreds of small business owners fairly by ending the practice of stretching out payment terms to 90 days and beyond,” the minister said in a public statement.
Businesses come on board
Although some major companies like Peabody Energy, NHP Electrical Engineering Products and Stanwell Corporation have agreed to pay within 30 days, Fentiman wants more businesses to follow suit.
“I encourage others to get on board and do the right thing,” she said. “All businesses, big or small, have an obligation to support local communities where they and their employees work. That’s why we need to hold large mining companies to account on fair payment terms for their small business suppliers.”
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More jobs and revenue
The Resource Industry Network has found shortening payment terms to 30 days could create an extra 380 jobs for Mackay and Fitzroy regions alone.
“The impact of extended payment terms slows down the flow of cash in regional economies like Mackay, including limiting the capacity of all business but particularly small businesses to expand and employ new staff,” State Member for Mackay Julieanne Gilbert said. “All businesses have a responsibility to support the local communities where they and their employees work.”
The Australian Small Business and Family Enterprise Ombudsman recently estimated late payments can create cashflow pressures totalling up to $234 billion in lost revenue according to Fentiman.