Legislation has been introduced to the Australian Parliament which forces big businesses to be transparent about their payment times. The tabled Payment Times Reporting Bill 2020 will require businesses with turnover of more than $100 million to publish information about their payment policies.
The Australian Small Business and Family Enterprise Ombudsman Kate Carnell said 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 up front and honest about the time it takes to pay their small business suppliers. 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.”
Ms Carnell says the legislation introduced will apply to around 3,000 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.”
Ms Carnell says her office will be invoking the powers on hand to investigate any reports of big businesses failing to live up to the information provided on this register once it is implemented.
However, she notes that the Payment Times Reporting Framework is only one piece of the puzzle as it won’t solve the problem of late payment times on its own.
“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,” Ms Carnell says.
“Ultimately, cash flow is king for small business and we know that if small businesses are paid on time, the whole economy benefits.”