Procurement policies across the Australian Public Service are to be changed in a bid to encourage the nation’s biggest companies to pay their accounts with small businesses promptly.
Announced by the Prime Minister and Minister for Small and Family Business Skills and Vocational Education, the new rules will require the nation’s top 3,000 companies tendering for Government contracts to commit to paying their bills within 20 days.
Prime Minister, Scott Morrison said the aim of the changes would be to ensure small and medium sized businesses were paid on time.
“Cash flow is crucial to the health of any business, but especially small business,” Mr Morrison said.
“Although there have been significant improvements, small businesses are still being shouldered with the burden of long payment times.
“We are taking action to ensure small business is not being used as a bank.”
He said the Government currently paid invoices under $1 million within 30 days but as from 1 July 2019 that would be reduced to 20 days.
“All levels of Government should set the standard and there should be no excuses for not paying small businesses on time,” Mr Morrison said.
“We want all States to follow the lead of NSW and adopt this practice.
“At our request, small business payment times will be placed on the Council of Australian Governments’ agenda for our next meeting on 12 December in Adelaide.”
