Payment Times bill introduced into Parliament
The Minister for Small Business says the reforms will provide a “shot in the arm” for small business with faster payment times and improved cash flow.
The Payment Times Reporting Amendment Bill 2024 was introduced into the House of Representatives yesterday and overhauls the existing Payment Times Reporting Act 2020.
It follows a review undertaken by Dr Craig Emerson last year into the effectiveness of the current Act and made several recommendations to improve the operation of the scheme.
Minister for Small Business, Julie Collins, said the bill would help level the playing field and encourage large businesses to treat their small business suppliers fairly.
“Our government knows how important cash flow and payment times are to small businesses. For small businesses who supply goods and services to large companies, it's simply unfair for those big corporations to delay paying the invoice,” Minister Collins said.
“Imagine walking into your local cafe, getting a coffee and saying I'll pay for that in 90 days. It's simply unthinkable just as it should be unthinkable for big businesses to create long delays when paying their small business supplies.”
Minister Collins said while Dr Emerson’s review of the payment times reporting scheme found that the scheme had merit, certain requirements are imposing unnecessary regulatory burdens on reporting entities.
“The reforms introduced will reduce regulatory burdens for reporting entities with obligations under the Act, incentivise large businesses to improve their payment times, streamline processes and remove inefficiencies,” she said.
The reforms include updates to the objects of the act, reflecting that the purpose is to improve outcomes for small business and incentivising large business to make prompt payments.
“[They also include] a shift to consolidated reporting in accordance with Australian accounting standards to improve the quality, completeness and comparability of data,” he said.
The reforms will also enable the regulator to undertake a range of activities including naming the best and worst-performing large businesses and undertaking research on the economy-wide impacts of slow payment.
They also provide a mechanism for the Minister for Small Business to give a direction to an entity in the slowest 20 per cent of payers overall to make enhanced disclosures.
The government will also be able to direct a slow-paying entity to state on its website and in procurement, ESG-related and other documents that it is a slow small business payer and provide information on how to access its payment times reports.
The payment times reporting regulator will then place a record in the payment times reporting register that the entity is a slow small business payer.
Minister Collins said the new reforms will be "a shot in the arm for small business" with faster payment times and improvements in cash flow. They will also reduce financing costs and result in productivity gains, she added.
