The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has welcomed legislation passed in the Senate to implement the Payment Times Reporting Scheme, requiring big businesses to be transparent about their payment times.
Ms Carnell says the Bill represents important progress at a time when it is critical small businesses are paid promptly.
"Australian small businesses have been hit hard by the COVID crisis so getting paid on time is key to their survival," Ms Carnell says.
"This Bill will require businesses with turnover of more than $100 million to publish information about their payment policies.
"It requires big businesses to be up front and honest about the time it takes to pay their small business suppliers.
"Importantly, the legislation introduced today will apply to around 3,000 Australian large businesses, including foreign companies that carry on an enterprise in Australia along with certain government enterprises.
"It also defines the small business as those that have a turnover of less than $10 million per year, which covers 99% of businesses.
"My office will be invoking the powers we have to investigate any reports of big businesses failing to live up to the information provided on this register once it is implemented.
"We support the Payment Times Reporting Scheme as passed by the Senate, however Labor's 'failsafe mechanism' amendment would have strengthened the Bill.
"The proposed failsafe mechanism would have allowed the regulator to force big businesses to pay their small business suppliers in 30 days or face hefty fines, but the amendment was unsuccessful.
"In reality, the Payment Times Reporting Scheme is a step in the right direction, but it won't solve the problem of late payment times on its own.
"Legislation requiring SMEs to be paid in 30 days is the only way to drive meaningful cultural change in business payment performance across the economy.
"Cash flow is king for small businesses and when small businesses are paid on time the entire economy benefits."
