Delivering faster payments for small business
The Hon Malcolm Turnbull MP
Senator The Hon. Mathias Cormann
Minister for Finance
The Turnbull Government will ensure small businesses providing goods and services to the Government receive faster payments.
The Government will now be required to pay invoices for contracts worth up to $1 million within 20 calendar days, an improvement from the current policy of 30 days.
This will put money back in the pockets of small business, helping them invest, grow and employ more workers.
It is a major win for the 6,800 Australian small businesses that work with the Commonwealth.
This announcement is part of our response to the Australian Small Business and Family Enterprise Ombudsman’s report into payment times and practices.
It demonstrates the Government’s continued commitment to small business, the engine room of employment in Australia.
The Government is already a proud leader in terms of payment times and practices, with the latest Pay On-Time survey showing Commonwealth agencies paid 97 per cent of their invoices within 30 days.
Our new payment benchmark will set an example to industry and to other levels of government. It will establish a new payment culture within Australia – a culture that recognises small business should not be used as a bank.
Federal Government agencies will be required to publish their payment time performance, significantly increasing transparency and accountability.
The response provides industry with an opportunity to improve its practices without unnecessarily adding to the regulatory burden in the economy that would stifle business. It delivers on our commitment to slash red tape.
The Government also acknowledges the proactive steps taken by industry through the Business Council of Australia’s supplier payments code. This code encourages big business to pay small businesses sooner and we welcome the support it has already received.
Digital technologies are also assisting small businesses in managing their business, streamlining administrative tasks and facilitating faster payments.
The Government has been actively engaging with the industry-led Digital Business Council development of eInvoicing.
The Government’s response to the recommendations will:
- Ensure small businesses are paid faster, setting a new benchmark for Government and industry;
- Increase the transparency and accountability of Commonwealth agencies and entities; and
- Create an accommodative environment for the development, innovation and adoption of technological solutions.
Today’s announcement builds on the Government’s strong small business agenda, which is focussed on cutting taxes, slashing red tape and levelling the playing field so the sector can grow and create local jobs.
The full response is available at www.treasury.gov.au