The Government recently announced it will ensure small businesses providing goods and services to the Government receive faster payments.
From July 2018, the Government will be required to pay invoices for contracts worth up to $1 million within 20 calendar days – an improvement from the current policy of 30 days. It is a major win for the 6,800 Australian small businesses that work with the Commonwealth.
The Government said in a joint statement that the new payment benchmark will set an example to industry and to other levels of government.
“It will establish a new payment culture within Australia – a culture that recognises small business should not be used as a bank.”
The CEO of Consult Australia, Megan Motto, said: “Small business is big business for the built environment and the Australian economy. Cutting red tape and making it easier to manage cash flow turns government into an enabler for small business – critical for industry confidence, our country’s competitiveness, and subsequently economic growth.”
As part of the Government’s response to the Australian Small Business and Family Enterprise Ombudsman’s report into payment times and practices, the government announced it will ensure small businesses are paid faster, setting a new benchmark for Government and industry; increase the transparency and accountability of Commonwealth agencies and entities; and create the right environment for the development, innovation and adoption of technological solutions.
Motto added: “The government spends billions each year on infrastructure alone, and whilst many of our large firms have the resource to work with the system, too many of our small firms feel they have to work against the system. For sole trader and small practice engineers, architects, and planners, time is money and their level of administrative burden, be it through contracts or managing debts, can be the difference between thriving or simply surviving.”
“We hear a lot about the government being a model litigant when it comes to procurement reform. This announcement is a step towards the government becoming a model client,” added Motto.