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deborah russell business
deborah russell business

BusinessJune 15, 2018

And everything was fine for small business forever more

deborah russell business
deborah russell business

Following a campaign on The Spinoff about dragged out payments to small business, a members’ bill has been lodged to name and shame corporate late-payers.

We did it! Just this week Labour MP Deborah Russell announced she was putting a members’ bill in the biscuit tin of democracy. The bill had the snappy title of “Companies (Disclosure of Payment Practice and Performance) Amendment Bill”.

“Boy that’s exciting Dave, what does it mean?” you might ask.

Good question. What it does is make it compulsory for large companies to submit an audited record of their payment terms and records, which will be made public on the Companies Office website. So we’ll know how long some companies take to pay their bills, and what the terms are.

This all came about following a rant I wrote earlier this year about how big business likes to give us littlies a kicking when it comes to paying. I cited Fonterra as one of the worst offenders, because they would often take 60 to 90 days to pay their suppliers, and if that was too long they’d hook you up with a pay-day loan type company to tide you over (that you’d need to pay interest on).

The Spinoff then did an amazing bit of work highlighting a bunch of companies’ payment terms and with this public shaming, Fonterra backed down and changed their terms to the regular 30-day payment plans that most people do. Good work Fonterra (but I still think you’re jerks).

Why do payment times to small business matter? We kept getting called the “backbone of the economy” but then nobody cared how we got treated. And I care how my backbone gets treated; it does useful things like keep me moving. While the big fancy corporates might be more productive and contribute bigger dollars to the economy, there’s a hell of a lot of small business in New Zealand.

We are about 95% of Kiwi businesses, and we employ about 40% of the workforce. If we’re not getting paid it’s a big deal. It hurts. It pushes you close to the edge, financially and personally, and not being paid means you can’t pay for things. It’s a helpless, demoralising quandary: if you complain too much about not being paid, will you get dumped by your client?

So Deborah Russell got in touch with me after the article ran, and said she was looking to put together a member’s bill and would I like to come talk to her about my complaints. “Sure,” I said and off I went to Bowen House. We had a nice chat, though I did make it a bit awkward when I asked “Is your solution to helping small businesses that don’t get properly paid for their work to get someone in from a small business and ask for their ideas for free?”

And it was! But she was super apologetic when she realised how that looked, and I said that getting something into legislation was more important and better for more people than my pettiness. So we moved on.

I presented a whole bunch of ideas to her that I believed would make it easier for small business, and she was enthusiastic and keen to help. I was excited. Since then, she’s been good enough to keep me informed of the journey that the formation of this bill has taken.

Then she emailed me this week to say it was being lodged and ta da! There it was on Twitter. She even thanked me for inspiring her to make the bill – hey you’re welcome! I’m always happy to have my angry rants lead to government bills, so other MPs, get in touch. I’ve got heaps of opinions on heaps of things.

I’m not naïve enough to believe this bill will fix all the problems small businesses face. Reporting on payment terms won’t make you a better large corporate, but it will mean we’ll be better informed. Consumers in the UK are already using the same information to make choices about where they shop and which companies they support (and the media are also indulging in a bit of healthy naming and shaming).

I also know the odds of the bill being pulled from the biscuit tin of democracy are slim; there are 69 bills in biscuit tin at the moment. However, this shows how change can happen. If you complain loudly and publicly enough, and an MP hears you and then you get to talk to them, they can flesh out your half-formed ideas and make bills and bam! Easy isn’t it?

I don’t want to get too partisan here, but this is a strong sign from the Labour/NZ First Government. This was an organic thing. Someone made public a grievance, a situation that was unfair to the little folk, and a Labour MP contacted them, and then did something about it, and is now trying to make real change – and I didn’t even have to buy a dinner at Antoine’s.

So what’s the upshot of all this? I guess it’s that if you want the chance to make change at a level that’s about a 1 out of 69 chance (which is better than no chance at all), then write something angry for the Spinoff.

Thanks Spinoff. Thanks Deborah. Thanks Labour. And thanks Obama.

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