Payment Times Reporting Bill enters the Senate
Measures to name and shame large businesses that are slow to pay small businesses have been introduced into the Senate this week.
The Payment Times Reporting Amendment Bill 2024 entered the Senate this week after passing through the House of Representatives.
The bill overhauls the existing Payment Times Reporting Act 2020 to remove inefficiencies, streamline processes in the current framework, and incentivise large businesses to improve their payment times.
The reforms implement a shift to consolidated reporting under Australian accounting standards to improve the quality, completeness and comparability of reported data.
The bill, once implemented, will also enable the regulator to undertake a range of activities including naming best and worst-paying large businesses and undertaking research on the economy-wide impacts of slow payment.
It also includes a mechanism for the minister for small business to give a direction to an entity in the slowest 20 per cent of payers (overall or by industry) to make enhanced disclosures.
The minister can 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’.
Speaking before the Senate on Monday, Senator Carol Brown said the revised framework will aim to improve cash flow for smaller businesses, alleviate administrative burdens and reduce financing costs.
“Small businesses are the backbone of the Australian economy, employing more than 5 million people and contributing more than $500 billion to the national economy,” Senator Brown said.
“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.”
The changes to the Payments Times Reporting Act follow a review undertaken by Dr Craig Emerson last year into the effectiveness of the current Act which made several recommendations to improve the operation of the scheme.
Minister for Small Business, Julie Collins, previously stated that the bill would help level the playing field and encourage large businesses to treat their small business suppliers fairly.
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.
