BHP’s announcement of a change in procurement policies to extend preferred payment terms of 30 days to all Australian businesses in local areas from December has been welcome by Government.
Similar decisions from the likes of Peabody and New Hope will boost the economies of regional towns where previous extended payment terms impacted cash flow is those communities.
BHP’s Mt Arthur Coal Asset President Elsabe Muller said the decision was made following a period of engagement with suppliers, host communities and the Federal Government.
“We’ve heard concerns about the impact of our standard global payment terms on local businesses, and recognise there is more we can do to support our local communities.
“We will extend our preferential terms further than the existing small and local businesses already captured.” she said.
Businesses doing work for BHP won’t need to apply for the new payment terms, and will be automatically moved to 30 days on December 1.
The Queensland Government has urged more companies to adopt similar practices.
Minister for Employment and Small Business Shannon Fentiman said BHP’s new approach would unlock cash flow to 700 local Queensland businesses.
She said disappointingly, not all mining companies are putting in place fairer payment terms.
“If BHP can make this change, all companies can.”