New legislation was introduced into the Federal Parliament late last week requiring large businesses to be transparent about their payment times, especially to their small-business suppliers. The Payment Times Reporting Bill 2020 will mean that businesses with over $100 million in turnover have to publish information about their policies, including payment times.
The Australian Small Business and Family Enterprise Ombudsman Kate Carnell welcomed the development, saying, “Much of the Australian small-business community has been devastated by the COVID-19 health and economic crisis and prompt payment times are critical to their survival.
“This reporting framework will require big businesses to be upfront and honest about the time it takes to pay their small business suppliers,” Carnell added. “It will be important that the information reported is easy to access and integrate.
“This gives small businesses some choice around who they do business with. Importantly, the legislation introduced today will apply to around 3000 Australian large businesses, including foreign companies that carry an enterprise in Australia along with certain government enterprises. It also defines the small business as those that have a turnover of less than $10 million, which covers 99 per cent of businesses.”
The ASBFEO vows to continue invoking its powers to investigate any reports of big businesses failing to live up to the information provided on this register once it is implemented.
“We support the Payment Times Reporting Framework as one piece of the puzzle, but it won’t solve the problem of late payment times on its own,” Carnell said. “Legislation requiring SMEs to be paid in 30 days is the only way to drive meaningful cultural change in business payment performance across the economy. Ultimately, cashflow is king for small business and we know that if small businesses are paid on time, the whole economy benefits.”
