The Morrison Government introduced a bill earlier this week aimed at getting the 3.5 million Australian small businesses currently operating paid on time by larger organisations.
It’s known as the Payment Times Reporting Bill, and is primarily aimed at supporting cash-strapped small businesses by requiring larger organisations to report their recent payment times. This, in turn, provides operators of small businesses with a list of large organisations and how ethical they are about paying their bills.
If the Bill passes, businesses with a turnover of more than $100 million per year will be required to record and lodge their payments terms, as well as times to suppliers and contractors, which would highlight organisations that are slow to pay their suppliers. This is said to be around 3,000 organisations, including foreign companies and certain government enterprises that are set to be compelled to release details of how and when they will pay a small business that is contracted.
The government says that they hope to “drive cultural change to improve payment times,” by making this an obligation for larger companies.
The manager of a small business will then be able to view these payment terms and times, and opt to collaborate with an organisation that pays their suppliers on time, without a problem.
Minister for Employment, Skills, Small and Family Business, Michaelia Cash who spearheaded the introduction of the bill said it’s more timely than ever for large businesses to support small businesses by paying on time.
“The Payment Times Reporting Bill 2020 will legislate transparency for large business payment times,” Cash wrote on her Linkedin account. “It will require large businesses with an annual income of over $100 million to report on how and when they pay their small business suppliers.”
Cash is saying that the government’s bill will help as many as 3.5 million small businesses in Australia to get paid on time by large businesses.
In a statement, Minister Cash added that “with the impact of COVID-19, it is even more important that large businesses, as stewards of their supply chains, pay their small business suppliers with the money they are owed promptly.”
“We are facing unprecedented challenges as we respond to the global COVID-19 pandemic, and timely payments are critical to keeping small businesses open,” she said.
The Payment Times Reporting Bill 2020 is said to include clauses that provide the necessary transparency for small businesses, without inundating large organisations with regulatory obligations, striking the right balance, according to the government’s claims.
“Through this Bill, the Morrison Government is backing Australia’s 3.5 million small businesses- they are the lifeblood of our communities and the backbone of the Australian economy,” Cash concluded.