The announcement by CIMIC, owner of engineering group UGL, followed concerns raised by Ms Carnell in September 2019 regarding reports the engineering company had extended its payment terms to 65 days and notified suppliers to contact Greensill Capital if earlier payment was required.
These concerns prompted the ACCC to look into issues around extended payment terms and reverse factoring.
“We welcome the announcement that CIMIC and UGL plan to return to 30-day payment terms for all of its small business suppliers by early next year as part of its yet-to-be-released Small Business Policy,” Ms Carnell said.
“CIMIC says it will publish its Small Business Policy for its operating companies, including UGL and CPB contractors in the coming weeks, in which suppliers will be eligible for 30-day payments. My office looks forward to reading this policy in detail.”
Ms Carnell also acknowledged the leadership shown by Greensill Capital, which pledged in May to discontinue the use of supply chain finance facilities by companies that misuse its products by pushing out payment terms.
“We know that late payments make a huge difference to small business’ bottom line and that is only amplified for small businesses that have faced unprecedented challenges in 2020,” she said.
“The latest CreditorWatch data for October shows businesses are being paid an average of 31 days overdue – an increase of 157 per cent on this time last year. This is having a devastating impact on small businesses, particularly those hit hardest by the COVID crisis.
“Ultimately cash flow is king for small business and we know that if small businesses are paid on time, the whole economy benefits.”