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21       Payment Times Reporting Bill 2020

Payment Times Reporting (Consequential Amendments) Bill 2020

Order of the day read for the further consideration of the bills in committee of the whole.

 

 

 

In the committee

Consideration resumed of the bills— and the amendments moved by the Minister for Employment, Skills, Small and Family Business (Senator Cash) ( see entry no. 6 ).

Debate resumed.

Question—That the amendments be agreed to—put and passed.

On the motion of the Leader of Pauline Hanson’s One Nation (Senator Hanson) the following amendment was debated and agreed to:

Payment Times Reporting Bill 2020

Page 46 (before line 10), before clause 58, insert:

57B   Requirements for review

   (1)  Without limiting section 57A, the review must consider the following:

                       (a)  whether the operation of this Act is meeting the objects set out in section 3;

                      (b)  whether related government policies, including policies relating to electronic invoicing, have improved the payment terms and practices of reporting entities in relation to their small business suppliers;

                       (c)  whether other measures such as mandating one or more maximum periods (the mandated maximum payment periods ) for the payment of small business invoices by reporting entities would be more effective in improving those payment terms and practices.

   (2)  In considering mandated maximum payment periods, the review must consider the following:

                       (a)  how mandated maximum payment periods could best be implemented, taking into account:

                                     (i)  potential regulatory burdens on reporting entities; and

                                    (ii)  the need to avoid unintended consequences for small businesses;

                      (b)  the mandated maximum payment periods that would be appropriate to improve payment terms and practices, including:

                                     (i)  whether mandated maximum payment periods of 30 days, 20 days, or 10 days or less would be appropriate; and

                                    (ii)  whether mandated maximum payment periods of 5 days would be appropriate if electronic invoicing were used;

                       (c)  the impact of sector or industry-specific differences, including how mandated maximum payment periods could be imposed on sectors and industries with differing payment terms and practices;

                      (d)  the compliance or enforcement arrangements that would be appropriate to support mandated maximum payment periods, including whether a penalty regime should be established for the following purposes:

                                     (i)  to require a reporting entity to pay small business invoices issued to the entity within a specified period, if the entity has a median payment period for small business invoices issued to the entity that is longer than the mandated maximum payment period;

                                    (ii)  to require a reporting entity that has failed to pay a small business invoice issued to the entity within the period specified in the terms of the relevant contract to pay interest on that payment.

Senator Lambie moved the following amendments together by leave:

Payment Times Reporting Bill 2020

Clause 1, page 1 (line 8), after “ Reporting ”, insert “ and Enforcement ”.

Clause 3, page 2 (after line 23), at the end of the clause, add:

               ; and (c)  to enforce the payment of small business invoices by a reporting entity within 21 days of issue.

Clause 4, page 3 (after line 9), after the paragraph beginning “A reporting entity”, insert:

A reporting entity must pay a small business invoice within 21 days of the issue of the invoice.

Page 21 (after line 26), after Part 3, insert:

Part 3A Enforcing payments

Division 1 Introduction

27A   Simplified outline of this Part

This Part imposes an obligation on a reporting entity to pay a small business invoice within 21 days of the issue of the invoice.

A civil penalty applies to a reporting entity that fails to do so.

If a reporting entity is ordered to pay a pecuniary penalty, the Regulator must pay to the issuer of the invoice an amount equal to the penalty.

A small business supplier may request the Regulator to apply to a court for the imposition of a civil penalty under this Part.

Division 2 Payment of small business invoices

27B   Reporting entities must pay small business invoices within 21 days

   (1)  A reporting entity must pay a small business invoice in full before the end of the period of 21 days beginning on the day the invoice was issued.

Civil penalty

   (2)  A reporting entity is liable to a civil penalty if:

                       (a)  the entity is required to pay a small business invoice; and

                      (b)  the entity fails to comply with the requirement in subsection (1); and

                       (c)  the entity is not a volunteering entity.

Civil penalty:            200 penalty unit s.

   (3)  For the purposes of subsection (2), the reference in paragraph 82(5)(a) of the Regulatory Powers Act to 5 times the pecuniary penalty specified for the civil penalty provision has effect as if it were a reference to an amount equal to the lesser of:

                       (a)  either:

                                     (i)  if the invoice is paid in full before the day that the order to pay the penalty is made—5% of the total amount of the small business invoice multiplied by the number of days in the period beginning on the 22nd day after the invoice was issued and ending on the day the invoice was paid in full; or

                                    (ii)  if the invoice is not paid in full before the day that the order to pay the penalty is made—5% of the total amount of the small business invoice multiplied by the number of days in the period beginning on the 22nd day after the invoice was issued and ending on the day the order is made; or

                      (b)  0.2% of the total income for the person for the income year in which the contravention occurred.

Note:         This subsection modifies the maximum pecuniary penalty that a body corporate can be ordered to pay for a contravention of subsection (2).

   (4)  If an order is made for the reporting entity to pay a pecuniary penalty for the contravention of subsection (2) in relation to a particular small business invoice or particular small business invoices, the Regulator must pay an amount to the small business supplier that issued the invoice or invoices that is equal to the amount of the penalty.

   (5)  Amounts payable under subsection (4) are to be paid from money appropriated by the Parliament for the purposes of this section.

27C   Requests for Regulator to apply to court for the imposition of a civil penalty

   (1)  A small business supplier may request the Regulator to apply to a court for the imposition of a civil penalty under section 27B.

   (2)  A request under subsection (1) must be in such form and be accompanied by such information as is required by the Regulator.

   (3)  Subject to subsection (4), if the Regulator is satisfied that the reporting entity has failed to comply with the requirement in subsection 27B(1), the Regulator must either:

                       (a)  notify the reporting entity of its obligations under this Part and its liability for a penalty ( issue a warning ); or

                      (b)  apply to a court for the imposition of a civil penalty under subsection 27B(2).

   (4)  If the Regulator has already issued a warning to the reporting entity on 3 separate occasions in the 3 years preceding the request, the Regulator must apply to a court for the imposition of a civil penalty under section 27B.

Note:         The Regulator may apply to a court for the imposition of a civil penalty even if the Regulator has not already issued a warning to the reporting entity on 3 separate occasions over a period of 3 years.

   (5)  The Regulator must notify the small business supplier of the action that the Regulator has decided to take as soon as practicable, but in any case by not longer than 4 weeks after the request is made.

Question—That the amendments be agreed to—put and negatived.

Senator Farrell moved the following amendments together by leave:

Payment Times Reporting Bill 2020

No. 1—Clause 3, page 2 (line 23), after “practices”, insert “, including paying small business suppliers in less than 30 days”.

No. 2—Clause 5, page 5 (after line 23), after the definition of notifiable event , insert:

payment time , for an invoice, means the number of days in the period beginning on the day a small business supplier issued the invoice to the reporting entity and ending on the day that the invoice was paid in full.

No. 3—Clause 5, page 6 (after line 3), after the definition of protected information , insert:

recalcitrant reporting entity means a reporting entity declared under subsection 37B(5) to be a recalcitrant reporting entity.

No. 4—Clause 5, page 7 (after line 10), after the definition of subsidiary , insert:

supply chain financing arrangement means an arrangement under which a reporting entity undertakes to pay an invoice before the end of the relevant supply payment period if the supplier agrees to accept a discount on the payment or to incur an additional cost.

supply payment period means a period within which a payment under a contract is required to be made in relation to a supply of goods or services.

No. 5—Clause 14, page 13 (after line 11), after paragraph (1)(c), insert:

                     (da)  state the median payment time for all small business invoices paid by the entity during the reporting period; and

                     (db)  state the average payment time for all small business invoices paid by the entity during the reporting period; and

No. 6—Clause 14, page 13 (after line 28), after paragraph (1)(h), insert:

                     (ha)  include information and documents about any supply chain financing arrangement entered into by the entity in relation to a small business supplier; and

No. 7—Clause 17, page 16 (line 6), after “without charge”, insert “and in a machine-readable format”.

No. 8—Page 25 (after line 15), at the end of Division 2 of Part 4, add:

30A   Role of the Australian Small Business and Family Enterprise Ombudsman

   (1)  To avoid doubt, nothing in section 30 limits the operation of the Australian Small Business and Family Enterprise Ombudsman Act 2015 .

   (2)  The Ombudsman may inform the Regulator of an alleged contravention of this Act by a reporting entity either:

                       (a)  at the request of a small business supplier; or

                      (b)  if the Ombudsman has otherwise become aware of an alleged contravention.

   (3)  Within 30 days of being informed of an alleged contravention under subsection (2), the Regulator must respond to the Ombudsman to advise:

                       (a)  if the Regulator decides to take action in relation to the alleged contravention—of the Regulator’s findings in relation to the alleged contravention and the action that the Regulator intends to take; or

                      (b)  if the Regulator decides not to take action in relation to the alleged contravention—of the Regulator’s findings in relation to the alleged contravention and the reasons that the Regulator has decided not to take action; or

                       (c)  that the Regulator has required the reporting entity to appoint an auditor to carry out an audit in relation to the entity’s compliance with this Act under subsection 30(2) but:

                                     (i)  the entity has not yet given the Regulator a writt en report setting out the results of the audit; or

                                    (ii)  the Regulator has otherwise not yet made a decision on what action the Regulator intends to take in relation to the alleged contravention; or

                      (d)  that the Regulator is using or has used:

                                     (i)  the Regulator’s monitoring powers under Part 2 of the Regulatory Powers Act; or

                                    (ii)  the Regulator’s investigatory powers under Part 3 of the Regulatory Powers Act;

                            in relation to the alleged contravention but has not yet made a decision on what action the Regulator intends to take; or

                       (e)  that the Regulator has otherwise not yet made a decision on what action the Regulator intends to take and the reason that the Regulator has not yet made a decision.

   (4)  If the Regulator responds to the Ombudsman under paragraph 30A(3)(c) or (d) the Regulator must also inform the Ombudsman, as soon as practicable after the Regulator decides to take, or not to take, action in relation to the alleged contravention, of the Regulator’s findings in relation to the alleged contravention and:

                       (a)  if the Regulator decides to take action—the action that the Regulator intends to take; or

                      (b)  if the Regulator decides not to take action—the reasons that the Regulator has decided not to take action.

   (5)  If the Regulator advises the Ombudsman under paragraph 30A(3)(e) that the Regulator has not yet made a decision on what action the Regulator intends to take, the Regulator must inform the Ombudsman, at intervals of no longer than 30 days until the Regulator has responded to the Ombudsman under any of paragraphs 30A(3)(a) to (d), of the reason that the Regulator has still not made a decision.

   (6)  In this section, Ombudsman means the Australian Small Business and Family Enterprise Ombudsman established under the Australian Small Business and Family Enterprise Ombudsman Act 2015 .

No. 9—Page 33 (after line 23), after Part 4, insert:

Part 4A Payment times failsafe mechanism

Division 1 Introduction

37A   Simplified outline of this Part

This Part creates a payment times failsafe mechanism that is intended to provide an incentive for reporting entities to collectively improve their payment practices or run the risk of more stringent regulation.

The Regulator is required to report to the Minister after each reporting period after the first 3 reporting periods on the median and average times taken by all reporting entities to pay small business invoices.

The payment times failsafe mechanism is triggered if, after the first 6 reporting periods, the median of the median times reported by all reporting entities to pay small business invoices for a reporting period is more than 30 days. The Regulator must report this fact to the Minister.

Once the payment times failsafe mechanism has been triggered the Regulator must declare any reporting entity that has a median payment time for small business invoices of more than 30 days during a reporting period to be a recalcitrant reporting entity.

A recalcitrant reporting entity is required to pay all small business invoices within 30 days and is liable to a civil penalty if it fails to do so. The rules may provide for exemptions from this requirement.

Division 2 Late payment penalty

37B   Payment times failsafe mechanism

Report on median and average payment times

   (1)  As soon as practicable after the end of 3 reporting periods after the commencement of this Act and, subsequently, after the end of each reporting period, the Regulator must give the Minister a report that states:

                       (a)  the reporting period or reporting periods to which it relates; and

                      (b)  the number of reporting entities that submitted a payment times report or payment times reports to the Regulator relating to the reporting period or reporting periods; and

                       (c)  the median of the median payment times reported by all reporting entities that submitted a payment times report or payments times reports to the Regulator relating to the reporting period or reporting periods; and

                      (d)  the average payment time for all reporting entities that submitted a payment times report or payment times reports to the Regulator relating to the reporting period or reporting periods.

   (2)  The Minister must cause a copy of a report to be tabled in each House of the Parliament within 5 sitting days of receiving it.

When the payment times failsafe mechanism is triggered

   (3)  The payment times failsafe mechanism is triggered if, after the end of 6 reporting periods after the commencement of this Act, the median of the median payment times under paragraph (1)(c) for a reporting period is more than 30 days.

   (4)  The report given to the Minister by the Regulator under subsection (1) in relation to the reporting period in which the payment failsafe mechanism was triggered, and each subsequent report given to the Minister in relation to subsequent reporting periods, must contain a statement that the payment times failsafe mechanism has been triggered.

Declaration that a reporting entity is a recalcitrant reporting entity

   (5)  If the payment times failsafe mechanism has been triggered, the Regulator must declare that a reporting entity is a recalcitrant reporting entity if:

                       (a)  the entity is not a volunteering entity; and

                      (b)  the entity’s median payment time was more than 30 days during:

                                     (i)  the reporting period in which the payment times failsafe mechanism was triggered; or

                                    (ii)  any subsequent reporting period.

   (6)  The Regulator must write to a recalcitrant reporting entity as soon as practicable after the Regulator has made a declaration under subsection (5) in relation to the entity to inform the entity of the declaration and of the entity’s obligations under subsection (8).

   (7)  A declaration by the Regulator under subsection (5):

                       (a)  is not a legislative instrument ; and

                      (b)  has effect for a period of 2 years beginning on the day the declaration is made.

Recalcitrant reporting entities to pay small business invoices within 30 days

   (8)  A recalcitrant reporting entity must pay a small business invoice in full before the end of the period of 30 days beginning on the day the invoice is issued.

   (9)  Subject to subsection (10), the rules may provide that the requirement in subsection (8) does not apply in relation to a specified entity or specified entities either generally or in specified circumstances.

Note:         An entity that wishes to rely on an exemption in the rules in relation to a contravention of a civil penalty provision bears an evidential burden (see section 96 of the Regulatory Powers Act).

(10)  Rules may only be made for the purposes of subsection (9) after the payment times failsafe mechanism has been triggered.

Civil penalty

(11)  A reporting entity is liable to a civil penalty if:

                       (a)  the entity is a recalcitrant reporting entity; and

                      (b)  the entity fails to comply with the requirement in subsection (8); and

                       (c)  the entity has not been exempted from the requirement in subsection (8).

Civil penalty:            350 penalty unit s.

(12)  For the purposes of subsection (11), the reference in paragraph 82(5)(a) of the Regulatory Powers Act to 5 times the pecuniary penalty specified for the civil penalty provision has effect as if it were a reference to 0.6% of the total income for the person for the income year in which the contravention occurred.

Note:         This subsection modifies the maximum pecuniary penalty that a body corporate can be ordered to pay for a contravention of subsection (11).

Senator Lambie moved the following amendments to Senator Farrell’s proposed amendment no. 9 together by leave:

Section 37A, omit “after the first 3 reporting periods”.

Section 37A, omit “after the first 6 reporting periods”, substitute “after the first 3 reporting periods”.

Subsection 37B(1), omit “after the end of 3 reporting periods after the commencement of this Act and, subsequently,”.

Subsection 37B(3), omit “after the end of 6 reporting periods”, substitute “after the end of 3 reporting periods”.

Question—That Senator Lambie’s amendments to Senator Farrell’s proposed amendment no. 9 be agreed to—put and negatived.

Question—That the amendments be agreed to—put.

The committee divided—

AYES, 23

Senators—

Ayres

Gallagher

McCarthy

Sheldon

Bilyk

Hanson-Young

McKim

Siewert

Carr

Keneally

O’Neill

Urquhart*

Chisholm

Lambie

Patrick

Walsh

Farrell

Lines

Polley

Watt

Faruqi

McAllister

Pratt

 

 

 

NOES, 24

Senators—

Antic

Colbeck

McGrath

Rennick

Askew

Davey

McLachlan

Ruston

Brockman*

Duniam

McMahon

Ryan

Canavan

Fierravanti-Wells

Molan

Scarr

Cash

Henderson

O’Sullivan

Smith, Dean

Chandler

Hughes

Payne

Stoker

* Tellers

Question negatived.

The Payment Times Reporting Bill 2020 agreed to and reported with amendments and the Payment Times Reporting (Consequential Amendments) Bill 2020 agreed to and reported without amendment.

 

 

 

On the motion of Senator Cash the report from the committee was adopted and the bills read a third time.