It’s a no-brainer but how real is it? Big business has stretched out payment times to suppliers, in the name of cash management, as far as 120 days. It’s a shocker, ignored by all except the Greens until now, though Labor has finally come good by proposing a “mechanism”, whatever that may be, to compel 30-day payment times.
“Velocity of money” the economists call it. The faster the payments between companies the more money shoots about the economy more quickly, spurring growth. Business has become so cynical, some multinationals are even offering their suppliers financing facilities on their 90-120 day terms so they can clip the ticket for an interest fee, bizarrely, on money they owe to their small business suppliers.
Following a bit of noise here the Business Council came good with a voluntary “code” which appears to have been ineffectual. Funny that. Question is, will the Labor policy be enshrined as an enforceable law? Or is this “mechanism” less compelling?
Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.