The Federal Government has welcomed the decision by a number of mining companies to introduce 30-day payment terms for contractors and businesses.
However, it said it would not rule out putting legislation in place to ensure all companies improved their payment terms.
The Government’s Industry, Innovation, Science and Resources Committee handed down its report into mining today and said one of the key issues raised during the inquiry centred around terms of payment offered by mining companies.
Since the inquiry was launched, Anglo American and Peabody have decided to offer payment terms of 30 days or better to all Australian small and medium-sized enterprises.
BHP said it had also changed its payment terms policy to provide terms of 30 days or better to all locally-based supplier businesses, regardless of their size.
Committee chairman Barnaby Joyce said the changes would benefit businesses right around Australia.
“Mining companies have essentially been using regional businesses as a bank,” Mr Joyce said.
“It’s time for this practice to stop (and) our nation has an obligation to make sure that in the region where the wealth is extracted, the greatest benefit goes back to the people who live in the same area.”
Committee deputy chairman Luke Gosling said the Government could use legislation to address companies which didn’t improve payment terms.
“If the industry does not act, the committee is recommending the Government revisit legislating maximum payment terms,” Mr Gosling said.
The committee’s report also made recommendations aimed at increasing local procurement by mining and resources companies, addressing gaps in regional areas around skills, training and apprenticeships, and building innovation through the mining equipment, technology and services sector.
Other key issues for the inquiry were the impacts of FIFO work practices and the mining industry’s interactions with landholders.
“Benefits from mining should be long term, not boom and bust,” Mr Joyce said.
“One thing we do know is that communities thrive when their workers and families live in the area and can contribute to the local economy.”