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Big business is endlessly creative in screwing small business

Friday, October 04, 2019

They are very good, you know! That is, big businesses are really good at working out how to ‘do over’ their small business suppliers.

Perhaps big businesses are most creative in the ‘gotcha’ game in the way they avoid paying small business people on time. Ooops, or sometimes even avoid payment?

Australia’s largest construction conglomerate, CIMIC, has been outed. It has been reported that instead of paying its small business suppliers within 30 days, it’s going to be 65 days! Ah—very smart! And get this: They are doing this on state government-funded projects such as Melbourne’s Metro Trains and Brisbane’s Cross River Rail.

But it gets even ‘better’. CIMIC has effectively increased ‘its total days payable to 159 days from 135 days’. This has given CIMIC an extra $1 billion cashflow in recent months according to media reports.  And ‘fair minded’ CIMIC is even smarter. With great generosity CIMIC has arranged for small businesses to take out loans so that CIMIC can pay the small businesses late. They call it ‘reverse factoring’. Wha??

At least the Federal ALP is angry about this. They’ve called on the competition regulator (ACCC) to investigate ‘reverse factoring’. Damn good.

But where are the Victorian and Queensland governments stomping on such exploitative treatment? These governments hold the head contracts with CIMIC for the two projects mentioned above and make a big deal about small businesses being paid on time. CIMIC makes them look like two-faced hypocrites.

But CIMIC is also slapping the Morrison government in the face. Early this year the government committed to developing a new payment scheme. CIMIC are saying ‘go jump’ to that idea. It’s about time such companies were denied government work.

But at least one big business abuse of small business is being addressed. The Federal Court has fined Forest Meiers Construction $275,000 for denying a small tiling company work because the tilers did not have a CFMEU agreement.

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