Late bill payment to small businesses angers Small Business Commissioner David Eaton

David Eaton addressing the annual City of Stirling mayoral small business breakfast.
David Eaton addressing the annual City of Stirling mayoral small business breakfast.

THE head of the Small Business Development Corporation has lashed out at the time it takes corporate Australia to pay small businesses.

WA Small Business Commissioner David Eaton said late payment hindered cash flow and jobs in his speech as the guest of the annual City of Stirling mayoral small business breakfast on Wednesday.

He said the SBDC had been involved in a government inquiry into payment times and practices.

“The findings I found quite stunning,” he said.

“Would you believe that in Japan on average corporations pay small business providers and suppliers five days early.

“So there’s something in their culture that says that’s just the right thing to do.

“In the UK they pay six days late and in the US seven days late.

“And you would think that our legal and financial system coming from the UK and much of our corporate behaviour following the US, we’d be similar. No.

“Australia is the poorest in its payment practises… on average 26 days late.

“That means that for every corporation paying their bills on time, somebody was paying them 52 days late. And I think that’s conservative.”

Mr Eaton said the SBDC had used the findings to shame some large brands in Australia “to simply pay their bills on time”.

“I find this actually extraordinary because I was born in this country and I believed we were fair,” he said.

He said the Business Council of Australia had introduced a register to encourage businesses to pay on time.

The Federal Government had now committed to pay its bills on 20 days. And the State Government was also committed to earlier payment.

He said research by the Harvard Business School had shown that a move by US President Barack Obama to get federal agencies to pay on 10 days had created jobs.

“That simple act created employment because people had the capital to grow their business,” Mr Eaton said.

“If corporate Australia is this late they’re actually creating unemployment.

“You can tell it riles me.”