The Australian Small Business and Family Enterprise Ombudsman Kate Carnell is encouraging small businesses to have their say on a draft law requiring big businesses to be more transparent about their payment times.
The federal government has today opened consultation on the draft Payment Times Reporting Framework legislation that will require businesses with turnover of more than $100 million to publish information about their payment policies.
“Cash flow is king for small businesses and we welcome the federal government’s continued efforts to ensure they are paid on time,” Ms Carnell says.
“This framework will require big businesses to be upfront and honest about the time it takes to pay small businesses, to help small businesses choose who they supply.
“The legislation will apply to about 2,500 large Australian businesses, including foreign companies and government entities.
“Late payments by large businesses to small businesses account for 53% of all invoices, according to data from Xero.
“That’s $7 billion of working capital that Australian small businesses are missing out on every year – money they could be using to grow their business.
“Small businesses can now provide their feedback on this proposed reform which is designed to drive cultural change in business payment performance across the economy.”
Consultation on the draft legislation is open until 6 March via https://consult.industry.gov.au/