SYDNEY, Australia, July 19, 2021
Originally published in The Australian Financial Review by Michael Bleby
The biggest of those challenges will be paying staff and bills without a cushion such as JobKeeper. Industry bodies on Sunday warned that smaller businesses, in particular, would go to the wall without financial support.
“It’ll be a cash flow crisis,” said Master Builders NSW executive director Brian Seidler, who said it would hit large and small contractors.
“When did the subcontractor last get their progress claim to allow for a two-week shutdown? If you’ve got 600, 400 employees [to pay] over two weeks, you’re talking millions. Where does that come from?”
Many subcontractors are asking the same question.
Earlytrade is a payments platform that lets subcontractors, who often operate on 30-day terms, negotiate faster payment in exchange for a discount on their total invoice. Claims on the platform surged on Saturday after the announcement.
“We see panic,” Earlytrade chief executive Guy Saxelby said.
“As soon as the announcement was made we had early payment requests coming through. We had just under 1250 requests come in overnight, which is about 500 per cent more than we would see across the entire network on any one day. We normally get 250 requests per day and yesterday was over 1200.”