Senate agrees to amendments to payment times bill
The amendments will see the regulator publish a list of fast small business payers as part of changes to the payment times reporting scheme.
The Senate has agreed to amendments put forward by the Coalition for the Payment Times Reporting Amendment Bill 2024, which will recognise large entities paying small businesses in 20 days or less.
When legislated, the amendments will require the regulator to maintain and publish a list of fast small business payers on the Payment Times Reports Register.
This is in addition to the other changes being implemented by the bill including changes to improve the quality of the data being reported under the scheme and enabling the regulator to name and shame large businesses that are slowest to pay small businesses.
Speaking in the Senate on Wednesday, Senator Paul Scarr said while the changes in the original bill will help shine a light on those who are slow to pay small businesses, it is also important to recognise businesses paying small businesses within appropriate time frames.
Senator Scarr said that data from the Australian Small Business and Family Enterprise Ombudsman indicates that around 31 per cent of large businesses are paying invoices within 30 days or less.
The data from ASBFEO showed that around a quarter or 24 per cent of big businesses take more than 120 days to pay their small business suppliers.
"That 31 per cent who are actually doing the right thing should be acknowledged. It shouldn't just be a stick, there should also be a carrot," he said.
Large businesses will be recognised as a fast payer if for two consecutive reporting periods under the payment time reporting scheme they are paying their small business suppliers within 20 days or less.
"The public should be aware of that and businesses should be able to market that to their customers. We can then take that into account when deciding whether or not we're going to purchase products or services from a particular organisation," Senator Scarr said.
The amendments also introduce civil penalties for reporting entities who make false representations about being a fast small business payer.
Senator Scarr said overall, the bill would help curb a growing trend in payment practices where large and multinational businesses extend payment times to improve their working capital efficiency.
"Extending payment times for suppliers, effectively uses the businesses in the supply chain as a cheap form of finance," he said.
"In effect, the big business, the customer, is using the [small business] as a means to finance their working capital. It really is unacceptable in this day and age.
"This is an important issue and these are important reforms."
