SMALL businesses providing goods and services to the Australian government will have their invoices paid faster following an announcement through the week by the Minister for Small Business, Michael McCormack.
The government will now be required to pay invoices for contracts worth up to $1 million within 20 calendar days, an improvement from the current policy of 30 days.
This will put money back in the pockets of small business, helping them to invest, grow our local economy, create jobs and employ more workers.
It is a major win for the local small businesses that have contracts with the federal government and demonstrates our commitment to these hard-working Australians.
Small business is the engine room of our local economy, and we are taking action to change the payment culture in Australia and ensure small businesses are not be used as a bank.
The Australian government is already a proud leader in terms of payment times and practices, with the latest Pay On-Time survey showing Commonwealth agencies paid 97 per cent of their invoices within 30 days.
The government will also take action requiring its agencies and entities to publish their payment time performance.
This will significantly increase the level of transparency and accountability and ensure agencies meet their obligations consistent with government payment policies.
Some small business have waited at times for many months to be paid for work already completed which is frustrating and a significant burden for the cash flow of a small business.
This is a good outcome for small business and I hope it will set an example to industry and to other levels of government to come on board with faster payment times.
This announcement builds on the government’s strong small business agenda.
The Coalition government understands small businesses are the backbone of our economy and we are backing small business through:
• Our Instant Asset Write-off that means small businesses can instantly deduct each and every asset under $20,000.
• Cutting taxes for small businesses to the lowest rate in 50 years.
• Landmark export agreements with China, Japan and South Korea that are opening up new opportunities for businesses.
• The abolition of $5.8 billion worth of red tape. This includes introducing: simplifying Business Activity Statements; a Small Business Superannuation Clearing House; and hundreds of other decisions that are making life easier.
The full response is available at https://treasury.gov.au/publication/australian-government-pay-on-time-survey-performance-report/