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On Time Payments. Top priority for small business

Monday, July 13, 2020

The Senate is currently considering a Bill that will require large businesses to report their payments to small business suppliers. Being paid on time is a top priority for all self-employed small business people.

We gave evidence to the Senate last week (8 July) and made the following points.

We expect the Morrison government to fully implement its election promise on pay-on-time issues. This is a three-phase promise it made, namely:

  1. The government will require federal departments to pay their small business suppliers within 20 days—this has been implemented and we congratulate the government on this.
  2. A register is to be established for large businesses to report their payments to small business. The Bill to establish this is currently before the Senate and the subject of the current inquiry.
  3. Large businesses that supply services and goods to the federal government will have to pay their small business suppliers on time or lose access to government work. We consider this the most important item and call on the Morrison government to implement this before the next election.
Here’s our submission to the Senate inquiry. It’s not too long! You can hear our evidence to the Senate or read the Hansard (starts on page 14).

One of the big debates is about whether pay on time should be mandated under law. Our response on this is:
  • Commercial leverage as per (3) above is the most powerful tool that can be used to get large businesses to pay on time.
  • In principle we support mandating but we should wait to see the results of the three-phase process above.
We urged the Senate to pass the Bill quickly, as small businesses being paid on time is a critical reform, particularly to assist post-Covid-19 small business recovery.

PS: We recently alerted everyone to the aggressive threats being made by the ATO over Covid-19 support auditing. We’ve reported on this here and here. Remember: if you are a Protected SEA member and are confronted by ATO aggression, we will provide support.

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