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Thursday, 13 September 2018
Page: 9037


Mr CHRISTENSEN (Dawson) (11:47): Small businesses create jobs by growing. With the resurgence in the mining sector, there is plenty of opportunity for businesses to grow in Central and North Queensland, but the ability of a small business to grow depends a lot on cash flow and having the capital to invest in that growth. So they need to get cash in the door by having customers pay their bills on time. This is where growth in Central and North Queensland is actually coming undone. You see, large mining companies are not paying their bills on time. They're not paying their suppliers on 30-day terms like most other businesses. They've stretched terms out to 60 days, in some cases 90 days, and some suppliers are waiting 120 days and beyond. It's ridiculous.

The mining companies are getting away with it because smaller businesses, in particular, feel that if they don't roll over and accept it, they won't have a business at all. It's not just small business either. If a big mining company stretches out payment terms for a major contractor, that major contractor then stretches out payment terms for their contractors, and on and on it goes until it affects a small business that is, ultimately, their supplier. It cascades down like a waterfall, and at the bottom of this very murky waterfall are the mums and dads who just want a job, but they have their employment put in jeopardy because a huge multinational company, with the ability and the finance to pay its bills on time, simply isn't. That's why I've brought this issue to this parliament—to Canberra and the government—because these extended payment terms are a handbrake on our local economy, on the regional economy, and they are preventing job creation.

I am pleased to say that the Liberal-National government set up a parliamentary inquiry to investigate this issue. Officially it's an inquiry into how the mining sector can support businesses in regional economies, but locals are simply referring to it as the 'payment terms inquiry', because that is the biggest issue around the mining industry affecting regional communities at the moment.

I attended hearings in both Rockhampton and Mackay recently, with the member for New England and the member for Lyons. I congratulate those people who came forward and told their story. I appreciate the risk that they engaged in in taking the time to tell their story, because many businesses are too scared to say anything publicly about this issue and their circumstances, for fear of retribution by multinational mining companies and losing their business altogether. But I do thank the mining company that attended, BHP, for participating. I've got to say their testimony wasn't entirely helpful. They refused to answer a question about when they themselves got paid for the coal they delivered to their customers. While they didn't answer, I can tell you I pretty much know when they get paid. Most of their invoices would be as the coal is loaded on the ship, or perhaps even before it's transferred to be loaded onto the ship. But they are expecting that small Australian businesses are going to wait 120 days and beyond.

Not only are these practices out of step with normal business practices in our communities but they're out of step with supplier expectations. They're also out of step with community expectations, particularly in regional Queensland. Regional Queenslanders expect that, when a hole is being dug in their backyard, the right thing will be done by local businesses and by local workers. That includes a good proportion of full-time jobs being created in their own backyard. Yet we have headquarters, management and automation centres in capital cities, and we even heard in that inquiry about a payment system headquarters and staff being based out of Kuala Lumpur. Goodness knows why it's then going to be a problem!

The Resource Industry Network in Mackay made a submission to the inquiry and spoke on behalf of small to medium enterprises that are too scared to put their name to their own submissions. They advocated for a return to 30-day payment terms, and they commissioned Lytton Advisory to investigate and analyse the impact of these extended terms. They found reverting to 30-day terms would add 380 jobs to the regional economy and a further $150 million in wages and $250 million in gross regional product, taking into account flow-on effects. The report found a third of suppliers had more than half their revenue on extended payment terms. Two-thirds found it difficult to get finance since extended payment terms had come in. Three-quarters affected by extended payment terms were cutting back on capital. On and on it goes. Mining companies need to do the right thing and pay within 30 days.