Under the Victorian Government's Fair Payments Policy, invoices charged to applicable Victorian Government departments and agencies valued at less than $3 million are required to be paid within ten business days - with suppliers able to apply for penalty interest on payments received beyond this period.
The Victorian Small Business Commission Annual Report has assessed the Victorian Government's compliance with the policy, which has revealed across 2024-25:
- Fire Rescue Victoria paid 67 per cent of bills on time and accrued $7,465.90 in penalty interest.
- Holmesglen Institute paid 38 per cent of bills on time and accrued $1,589 in penalty interest.
- Victoria Police paid only 37 per cent of bills on time.
- State Trustees Limited paid only 24 per cent of bills on time - fewer than one in four.
- The Department of Health paid 63 per cent of bills on time.
- Museums Victoria - which received solvency funding in 2023-24 - paid just 22 per cent of bills on time.
Across all relevant Victorian Government departments and agencies, the compliance rate with the Fair Payments Policy was 81 per cent - meaning approximately one-in-five or 378,382 Victorian Government invoices valued under $3 million was paid late across 2024-25.
The penalty interest accrued by the Victorian Government would likely be greater if the Fair Payments Policy automatically applied penalty interest on late payments, rather than requiring suppliers to apply for this compensation.
Following a decade of financial mismanagement under Labor, Victoria's net debt is increasing by more than $2 million an hour and is projected to reach a record $194 billion by 2028-29.
Shadow Treasurer, Jess Wilson, said: "When the government can't pay its bills on time, it's clear just how dire Victoria's financial position is.
"The Victorian Government should be a model creditor and be paying small business suppliers when it says it will. Instead, Labor is scrambling to find the money to pay invoices and is racking up thousands of dollars in effective late-fees as a consequence.
"Labor's mismanagement harms the cashflow of small business and suppliers, and further damages Victoria's reputation as a safe and attractive place to do business.
"The Allan Labor Government cannot manage money and Victorians are paying the price."
Shadow Minister for Small and Family Business Brad Rowswell said: "How can small businesses have any chance of getting ahead and creating more opportunity, if the Victorian government can't even pay their bills on time?
"Labor's snub of small business demonstrates what Victorians already know: Labor simply don't understand the importance of small business to Victoria's economic growth and potential."
