PAYMENT TIMES CODE A GOOD START
29 May 2017
TODAY’S announcement of a code of conduct for big business payment times to small business is welcomed, Small Business Minister Michael McCormack says.
“Around Australia, I have heard from hundreds of small businesses about a range of issues and payment times are a real concern for many of Australia’s 3.2 million small businesses,” Mr McCormack said.
The Business Council of Australia today launched the voluntary ‘Australian Supplier Payment Code’ with a number of big businesses signing a pledge to pay their invoices within 30 days and to have payment times publicised.
“I understand what it’s like to run a small business and wait too long for payment. When you’re trying to pay wages, grow your business and feed your family, you know you can’t be used like a bank,” Mr McCormack said.
“I am pleased to see industry taking proactive steps to ensure small business invoices have reasonable payment terms and are paid on time by a number of big businesses, and I encourage more big businesses to follow suit.
“While I welcome this code as a positive first step, I will be keeping a close eye on how the code is adopted, its take up rate, how it works in practice and the encouragement it provides to big businesses throughout Australia.”
Mr McCormack said the Government is leading the way with its ‘pay on-time or pay interest’ policy.
“The Government pays all businesses within 30 days on supplier contracts valued up to $1 million or we pay interest with 97 per cent of these invoices paid on time,” Mr McCormack said.
“These numbers are even better for Government contracts under $10,000 which are paid almost immediately.
“It is only fair and reasonable big businesses pay small businesses within 30 days as well.
“No matter the history, size or sector of the hundreds of small businesses I have met, they all tell me the same thing – cash flow is key. Any move industry can make to improve cash flow for small business is very good news.”
Mr McCormack said the Australian Small Business and Family Enterprise Ombudsman Kate Carnell recently completed a report on payment times which is currently being considered by Government.
“The Ombudsman’s office is an effective and independent advocate for small business, and today’s announcement is testament to its advocacy for fairer payment terms and times for small business,” Mr McCormack said.
“I am carefully considering the Ombudsman’s report, and will continue listening to small businesses and monitoring the code’s implementation across Australia, as I lead the Government’s response.”
To find our more, search ‘small business’ or visit https://www.business.gov.au/smallbusiness.