The decision by the Australian Government mandating that all government departments pay small to medium business invoices for completed contract work within 20 calendar days has been applauded by Australia’s peak body for the recruitment and staffing industry.
The changes apply to all contracts valued up to one million dollars and is a vast improvement on the current standard 30-day payment window offered by many government departments.
Charles Cameron, CEO of RCSA (Recruitment & Consulting Services Association of Australia & NZ), said the announcement demonstrates that the government understands the importance of cashflow for small business and, critically, its own role in promoting sustainable and responsible business practices.
“Leadership on procurement and business terms for small business in Australia is critical to ensure that they can maintain sustainable and scalable business practices,” Cameron said.
“This is great news for our members on many levels. Many of our members fit within the small to medium business category and, furthermore, our members work directly with small to medium businesses in finding them tomorrow’s staff. To know that our members and their valued clients will be able to have this commitment from the government is a great step forward.
“The workforce services industry is now looking for the same level of leadership across State Government procurement so that there is a direct correlation between policy making on one hand and fair business practice on the other.”
Cameron said the importance of cashflow, particularly for small businesses, could not be understated and it was not uncommon for some businesses to close down despite being owed substantial sums of money.
The decision to mandate the small business payments period follows an April 2017 report by the Australian Small Business and Family Enterprise Ombudsmen (ASBFEO) which found that late payments have been an ongoing problem for small and medium business in Australia.
Cameron said the Turnbull Government should also be praised for including a mandatory reporting of invoice payments so it can track if departments are delivering on the government’s promise.
“This is another step to supporting Australian business and a commendable step by the government to lead by example when it comes to instituting shorter payment periods for contractors,” Cameron said.