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Minimum 30-day payment terms must be mandatory: NatRoad

The National Road Transport Association insists minimum 30-day payment terms are a must given the tight margins of the road transport industry.

An Australian Small Business and Family Enterprise Ombudsman’s review of payment times was supported by NatRoad according to Warren Clark, CEO National Road Transport Association, who cited small to medium enterprises needed better and easier access to capital to help sustain their business.

“Whilst we welcome the recent announcement, to measure the effects of late or extended payment practices on the cash flow of small businesses and family enterprises in Australia, more must be done,” he said.

“We believe that the Ombudsman’s inquiry will show that payment times in the road transport industry are too long. The introduction of an industry code that includes payment terms would significantly improve the viability of small trucking businesses.”

“Our members have told us that lengthy payment terms increase financial and administration costs, reduce the potential for growth and investment, and ultimately add to business uncertainty and failure.”

Clark said another inquiry would be unlikely to solve the problem.

“It is already evident from the prior ASBFEO inquiries that the industry is extremely vulnerable to extended payment time exploitation,” said Clark.

“So NatRoad has asked and will continue to press for the Commonwealth Government to introduce a mandated code covering payment terms for trucking businesses to include payment times, a prohibition on set-offs and pay when paid arrangements similar to the security of payments legislation that operates in the building and construction industry.”

“NatRoad will continue to support the work of the Australian Small Business and Family Enterprise Ombudsman in the current inquiry whilst maintaining that greater intervention by Government is needed. Ensuring business owners have good cash-flow will help grow and strengthen the whole economy.”

(Image: Warren Clark).

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