SLUGGISH businesses, who fail to pay bills before 120 days, will be the target of a new campaign by a national industry association.
The AI Group plans to unfurl the push with its chief executive Innes Willox flagging the plan during a business breakfast in Albury on Wednesday.
“It’s not naming and shaming but it’s more awareness about the damage that does to small business,” Mr Willox told the audience which included Albury and Wodonga’s mayors.
He later told The Border Mail the average bill paying period had jumped from 30 to 60 to 90 to 120 days and that was harming the economy.
“Small businesses can’t operate on the basis where they have to wait 120 days or more for a bill to be paid,” Mr Willox said.
“That impacts on their cashflow, it impacts on their supply management and their ability to pay wages.
“Bigger businesses are doing that in part because of the stress they are going through and their own cashflow problems but it really has a cascading effect on the economy.”
“We’ll be working with others to try to encourage businesses on a volunteer basis on the time it takes to pay their bills.
“It has crept from 30 to 60 to 90 to 120 days.”
Mr Willox said the AI Group would encourage businesses to sign agreements to wind back by their average payment periods.
“It’s going to be through awareness raising..really getting them to understand the impact of those sorts of issues on the supply chain,” he said.
The AI Group’s Albury-based regional manager Tim Farrah echoed the concerns of Mr Willox, saying Border subcontractors in particular were hit by the delays in payment.
“It does put an enormous amount of pressure on and if they’re starved of cash they’ve got no money to invest back in their business,” Mr Farrah said.
“It does stifle growth without a doubt and it stifles employment.
“It has crept in over the last five to ten years and the smaller ones pay a huge price and the community pays a huge price because we don’t see the investment and employment.”
Mr Willox also spoke of business sentiment being strong on the Border, state anomalies and the “infrastructure constipation” of governments.
He believes cross border commissioners are doing “increasingly good work” but noted continued frustrations over difference with payroll tax, workers’ compensation schemes and duties.
“But there is real optimism here,” Mr Willox said citing the Border’s diverse economy.