Reports today make clear the Minister for Small Business, Michaelia Cash, is in the dark about an unregulated payday lending scheme that forces small businesses to pay a fee to be paid on time.
 
The corporate regulator ASIC has revealed that “supply chain financing arrangements used by companies are not regulated under the provisions of the Act concerning credit or financial products or services”.
 
As The Australian reported today, this “contradicts advice — obtained under freedom of information — from the Department of Employment Skills and Small Business to Employment Minister Michael Cash, which said that as the practice of reverse factoring involved a financial service, it was likely to fall under the consideration of the ASIC Act 2001”.
 
ASIC provided its advice in response to questions from Labor. How is it that Labor has more up to date advice from regulators? Because Labor actually cares about small businesses being paid in full and on time.
 
In contrast, Minister Cash has let the most egregious forms of supply chain financing run rampant under her watch. It’s the Wild, Wild West for small businesses, forced to navigate a lawless landscape.
 
Michaelia Cash persists in making unsubstantiated claims that draft legislation – not even introduced into Parliament - about the Payment Times Reporting Framework is fixing the issue.
 
In reality, the draft legislation has just raised ongoing concerns of stakeholders as confirmed by the Small Business Division in Senate Estimates last night.
 
Labor urges Minister Cash to seek advice from regulators about where the payday lending scheme of reverse factoring sits and what can be done to rein it in.
 
Labor would also be happy to brief the Minister on our concerns, and would encourage her to engage with affected small businesses, the ACCC, ASIC and the Australian Small Business and Family Enterprise Ombudsman as Labor and the media have on the issue.

THURSDAY, 5 MARCH 2020