Government Agencies paid a record 90.6 per cent of invoices for low value contracts within 20 calendar days last financial year according to the Department of Industry, Science, Energy and Resources.
The Department said its annual Australian Government Pay On-Time Survey revealed a significant improvement on the 2018-2019 financial year which saw only 61.7 per cent of invoices for contracts of up to $1 million paid within 20 calendar days.
It said the survey supported the Department of Finance’s Supplier Pay On-Time or Pay Interest Policy which came into effect at the beginning of last year.
“The policy requires Government Agencies to pay invoices up to $1 million in 20 days, or five days when using e‑invoicing,” the Department said.
“Ninety-two Agencies reported on their compliance through the survey for the 2019‑2020 financial year, providing transparency about Government payment times,” it said.
“Long and late payments are a significant problem for small businesses.”
The Department said research undertaken in 2019 showed that late payments from large to small and medium sized businesses were estimated at $115 billion annually, with $7 billion owed to small businesses at any given time.
“Paying low value invoices in timely manner demonstrates Government commitment to support small business, and improve their cash flow to invest, hire and grow,” it said.
The Department said that by paying bills on time Agencies were also setting a benchmark for industry to reduce payment times for small business.
