Faster payment of Victorian small-business suppliers to be enforced

The Victorian Government has announced a new policy that will enforce the payment of invoices issued by the State’s small-business suppliers within 10 business days. The policy will affect all new contracts valued under $3 million and is set to take effect on 1 January 2021.

The move has been welcomed, with the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, describing it as an important measure to help small businesses in their ongoing recovery from effects of the COVID-19 pandemic.

“Fast-tracking payments to small businesses is a sure-fire way to help them get back on their feet following what has been an incredibly tough year,” Carnell said. “The Victorian Government’s new small business payment policy will also flow through to the broader economy, by getting money moving again.”

The latest CreditorWatch data for October shows businesses are being paid an average of 31 days overdue – an increase of 157 per cent on this time last year. The Ombudsman said that these figures have a “devastating” impact on small business.

“This should be seen as a benchmark for governments at all levels. If Victoria can do it, there’s no reason why it can’t apply across the board,” Carnell said. “Big businesses should also do the right thing by their small-business suppliers and pay them faster. Too many big businesses have used the COVID crisis as an excuse for poor payment times, which is clearly unacceptable.”