Inquiry into how the mining sector can support businesses in regional economies. CQUni Mackay. Angus, Jason, Georga, Tracie and Lochlan Newitt
Inquiry into how the mining sector can support businesses in regional economies. CQUni Mackay. Angus, Jason, Georga, Tracie and Lochlan Newitt Stuart Quinn

Family struck by injustices of mining industry

THE struggling Newitt family is stuck between a rock and a coalface.

Like numerous small businesses in the region, their company, Central Queensland Hire, has been impacted by a policy that allows major mining houses not pay them until 60 days after a job is done.

A federal parliamentary inquiry into the mining industry's impacts on regional areas held in Mackay yesterday heard the policies of the largest mining houses, including behemoth BHP, were placing their contractors into cash-flow drought.

Evidence given at the inquiry revealed 60-day payment terms had become an industry norm, with some mining companies giving businesses the opportunity to be paid in 10 business days for a "small settlement".

Mr Newitt said his company, which supplies bulk haulage to the mines through contractors, is a victim of these practices.

"My father always taught me, you do a fair day's work for a fair day's pay," he said.

"A man's word is a man's honour, it's the only thing you can ever own and I've seen a different side to this in recent years."

Mr Newitt told the inquiry he chose to expand the company in 2012, during the mining boom, but the "wheels fell off" within five months.

The decision was made to move Central Queensland Hire to Western Australia in order to keep the company afloat, before moving back to Moranbah in 2017.

Mr Newitt took on work from MCG Quarries Pty Ltd, who were contracted by BHP.

Due to the flow-on effect of extended payment terms, his first paycheck was due on December 15 last year.

He was paid $20,000 and to this day hasn't seen any more.

"I have an ATO debt in arrears, I have school fees for the children that aren't paid," he said.

"My credit rating was absolutely destroyed on the back of going to work for companies that work for companies like BHP."

Owned by prominent businessman Bill McDonald, MCQ Quarries went into liquidation officially on August 3.

It is understood the company was in strife partly because of the exhaustion of their cash flow - a side-effect of the 60-day payment policy.

Mr Newitt went to BHP directly but was told they were unable to help.

BHP representatives told the inquiry 60-day payment terms were a global standard for the company, a policy set by their chief financial officer that is "continually under review".

Payment terms increased from 30 days to 60 days in 2015. No reason was given for the change.

BHP said payments are made, on average, at 43 days.

Garry Scanlan, of peak economic lobby group GW3, said the payment terms were a "symptom of an impersonal and complex procurement system".

Mark Bushell of local accounting firm CE Smith & Co said the ripple-effect of the policy was hurting everyone from those owed millions to the lawnmower man.

Resource Industry Network general manager Adrienne Rourke told the inquiry $150 million in wages and 380 jobs could be added to the Mackay-Isaac-Whitsunday region in five years if payment terms were reverted.

Ms Rourke said mining houses have begun selling "supply chain financing" to businesses as a way to be paid quicker, in exchange for a small settlement discount.

"Absolutely business is very close to the wire with it and I daresay some have closed because of it," she said.

"RIN along with many of our members find it absolutely offensive to be offered a service where they can pay more (or take less payment) to be paid in 4-7 days." BHP representatives at the inquiry confirmed this scheme exists.

For Mr Newitt, he's still grateful for a few things.

"We still have a house, the (kids) still have a feed, they might not get to go fishing and they might not be able to go to the movies, but we will get through this," Mr Newitt said.

"I acknowledge without mines Mackay [wouldn't be] Mackay as we see it. While the mining industry is great for the area and community, there are also stories like mine."