Gladstone contractors owed over $4m by mining giants
MAJOR mining companies pushing out payments for contracted work are causing "devastating" losses for regional businesses.
That's according to Gladstone Engineering Alliance spokesman Kieran Moran, who said the city was one of many struggling under "extended payment terms" issued by mining giants.
He said a recent Federal Government inquiry looked into how the mining sector could better support regional businesses, one issue being the up to 90 days local contractors are potentially waiting to be paid by multinational companies.
Mr Moran said that due to the downturn of the industry in 2013 mining companies negotiated to stretch out invoice payments up to 90 days. It became common practice within the industry.
"But industry has picked up greatly, with coal prices and the economy, it's time to go back to those companies paying the local businesses what they're owed within 30-45 days again," Mr Moran said.
He said several Gladstone businesses had closed as a result and there was about $4 million in unpaid work across the region.
Mr Moran said those figures were similar in central and north Queensland.
Gladstone business Corfields Electrical waited almost a year to be paid for a mining contract and was "on the brink of closing". Owner Ken Corfield told the Observer in August that tens of thousands of dollars still owed was being "drip fed". The contract was due to be finalised last December.
Federal Member for Dawson George Christensen launched the Make it 30 Days campaign on October 4, aimed to encourage mining companies to pay within 30 days or less to "give local businesses a fair go".
Mr Christensen said Mackay businesses had been struggling for "far too long".
"The big mining companies (are) dictating to local contractors how long their terms of payment are going to be," he said. "What ends up happening is local businesses then struggle to make their own payments."
Mackay's Resource Industry Network found that reverting to 30-day payment terms would add 380 jobs, $150 million in wages and $250 million in gross regional product to the region's economy over the next five years.
One Mackay business owner, who did not wish to be named, said it was difficult to pay staff wages every seven days when the business was waiting 60-90 days to be paid for their work.
He recognised that not all mining companies were to blame. He said Glencore, New Hope Group and Whitehaven Coal were maintaining payments within 30 days.
He claimed BHP and Rio Tinto were the two main culprits. "BHP has a big footprint in this region so many locals are adversely affected," he said.
"When there is less cash in the business it impacts on the business being able to grow, have stock on the shelf, and invest in technology and research and development.
"You need surplus cash to invest in overhead roles but when the cash is tied up somewhere else you can't do that.''
Sign the petition online at www.makeit30days.com.au.