The Albanese Labor Government is progressing action to deliver on its commitment to improve small business payment times.
Today we are releasing draft legislation to overhaul the Payment Times Reporting Act 2020, and introduce reforms that will increase pressure on big businesses to pay small businesses on time.
These reforms are an important part of the Albanese Labor Government's commitment to level the playing field for small businesses.
The new reforms will be a shot in the arm for small businesses with faster payment times improving cash flow, alleviating administrative burdens and reducing financing costs.
Better payment times benefit everyone, with resulting gains to productivity supporting higher wages and profits, and expanding employment opportunities.
The overhaul implements the Albanese Labor Government's response to the independent review of the Act by the Honourable Dr Craig Emerson.
It will simplify reporting, reduce regulatory burdens and increase pressure on large businesses that are slow to pay, including naming and shaming slow payers.
The review identified a clear case for government intervention to hold large businesses to account.
This is why the proposed legislation introduces mechanisms that increase pressure on large businesses to improve their payment times to small businesses.
These include:
- Expanding the Regulator's functions to enable a range of activities to highlight good and poor payment conduct by large businesses, and undertake research on the causes and impacts of slow payment to small businesses.
- Consolidating reporting under Australian accounting standards so reported data gives a holistic view of payment times for corporate groups and enables meaningful comparisons of large businesses.
- Mechanisms to improve the transparency and shine a light on slow payers. This includes potential enhanced disclosure by persistently slow paying large businesses.
The overhaul will also streamline reporting and remove inefficiencies and unnecessary burdens under the Act.
Interested stakeholders are encouraged to provide a submission on the draft legislation by 29 April 2024.
The draft legislative package is available on the Treasury website.
