The dragline bucket on display at a Coppabella mine.
The dragline bucket on display at a Coppabella mine. Peabody Energy

Payment term issue hurting more than just 'small business'

THE unregulated habit of large companies stretching payment terms to 60 days or more is impacting for than just "small business", a peak industry group has warned, as the issue garners national coverage.

An ongoing Federal parliamentary inquiry has thrown the issue of extended payment terms into the spotlight, with a hearing in Mackay last month revealing mega mining houses were placing their contractors into cash-flow drought.

Evidence given at the inquiry revealed 60-day payment terms had become an industry norm.

The issue has now gained traction across all levels of government, with new federal Small and Family Business Minister Michaelia Cash declaring "enough is enough" on Monday, and state counterpart Employment Minister Shannon Fentiman penning a pointed letter to mining companies including BHP, New Hope and Glencore, asking them to rethink the way they deal with small businesses providing them services.

Resource Industry Network's Adrienne Rourke said it was important to remember that extended payment terms affected more than just "small businesses".

"While Senator Cash and Minister Fentiman have looked at this issue, which is really good, I've noticed both of them are talking about small business," she said.

"It's important that all levels of government know, that in our sector, the impacts are happening across the board.

"Because the definition of small businesses is 20 employees, there are businesses the size of 50 or a 100 which are still being massively impacted by payment terms."

Ms Rourke said when compared to major mining houses with workforces 30,000 people large, companies with a hundred employees are small.

"But in the scheme of what the government and tax office class as small business, they are not small business," she said.

"It's actually very much the medium [sized businesses] in between, that are local regional businesses, that are feeling the most impact."

A RIN report found $150 million in wages and 380 jobs could be added to the greater region in five years if payment terms were reverted.

Mackay MP Julieanne Gilbert said the payment terms is robbing the region of growth.