ASBFEO welcomes NSW Govt scheme to pay small business subbies sooner

The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, has welcomed a pilot program implemented by the NSW government to ensure faster payments to small-business suppliers and subcontractors.

The program, which runs until June, will mean faster payment times, with the aim of ensuring small businesses are paid within 20 days of issuing an invoice to a larger business in the supply chain. This initiative comes on the back of the introduction of the NSW Faster Payments Policy in 2018, which stipulates that small businesses directly contracted by the NSW Government are paid within five business days.

“This trial, which extends the existing faster payments policy to ensure larger companies with NSW government contracts pay their suppliers in 20 business days is very encouraging,” Carnell said.

“Fast-tracking payments to small businesses is the best way to help them recover after what has been an incredibly tough 12 months. This initiative will benefit small business suppliers and will also flow through to the broader economy.

“We know that small businesses, particularly those hardest hit by the COVID crisis, urgently need cashflow,” Carnell added. “The latest CreditorWatch data shows businesses are being paid on average 26 days overdue, which is absolutely devastating for them and highlights the importance of paying small businesses on time.”

The Ombudsman believes that the NSW Government’s faster payments program for small-business suppliers could be used as a benchmark to be followed by all State and Territory governments, and by Canberra.

“If NSW can do it, there is no reason why it can’t apply across the board,” Carnell said. ““Big businesses should also be doing the right thing by their small business suppliers by paying on time and ensuring they are complying with the Payment Times Reporting Scheme which came into effect on 1 January, 2021.”

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