New data showing a reduction in payment times to small businesses is welcome but underscores the important work still required to make further improvements.
The latest update released today highlights the average payment term from big businesses to their small business suppliers is now 35.4 days, a 5 per cent reduction since reporting commenced.
While this improvement is welcome, the Albanese Labor Government acknowledges small businesses should be paid more quickly, given that cash flow is the life blood of small businesses.
This is why the Government has committed $8.1 million to support a range of initiatives that will deliver better payment outcomes for small businesses.
This includes disclosing big businesses who fail to pay small businesses on time.
This new action was announced in response to the independent review of the Payment Times Reporting Act 2020 delivered by the Honourable Dr Craig Emerson.
The Albanese Government has committed to:
- Increasing pressure on big businesses to improve payment times by highlighting the best and worst payment performers.
- Overhauling the Payment Times Reporting Act 2020 to update the objects of the Act, simplify and streamline reporting, add proportionate regulatory powers and address inefficiencies with current reporting requirements and processes.
- Ensuring payment times are considered in development of relevant Government reforms and policies, including unfair trading practices reforms, eInvoicing and Government procurement.
- Reducing the regulatory burden for entities reporting under the Payment Times Reporting Scheme.
Together these initiatives will level the playing field to ensure small businesses are paid on time.
Better payment times benefit everyone with resulting gains to productivity, supporting higher wages and profits, and expanding employment opportunities.
Quotes attributable to Minister for Small Business, Julie Collins MP:
"While this new data is welcome our Government understands more work is required to ensure small businesses are paid on time.
The new initiatives we have committed to will help to level the playing field to ensure small businesses are paid on time.
This is a matter of fairness - big businesses should not take advantage of Australia's 2.5 million small businesses by failing to pay them on time.
I look forward to continuing work this year to deliver more action on payment times for small business."
