The Federal government has introduced new legislation to protect small businesses against late payments from large businesses as businesses look to recover following COVID-19.

The Payment Times Reporting Bill 2020 will require large businesses with a total annual income of over $100 million to transparently report when and how they pay small business suppliers.

This will allow small businesses to differentiate large businesses that pay on time from those that don’t, making it easier for small businesses to make more informed decisions on who they are connected with.

Large businesses will also be requested to provide a detailed report of their supply chain financing practices, highlighting periods where it is used to extend payment times.

Minister for Employment, Skills, Small and Family Business, Senator Michaelia Cash said the new legislation would provide a much needed level of financial security for small businesses who are struggling to recover following the COVID-19 pandemic.

“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 the money they are owed promptly,” said Senator Cash.

“We are facing unprecedented challenges as we respond to the global COVID-19 pandemic, and timely payments are critical to keeping small businesses open.”

The introduction of the new legislation will affect approximately 3,000 large businesses, including foreign companies that carry on an enterprise in Australia, as well as some 3.5 million small businesses operating locally.

The Payment Times Reporting Bill 2020 has been developed in collaboration with small and large businesses, business representatives and government officials and comes on the back of two years of discussions and consultations.

Source: Department for Employment, Skills, Small and Family Business | Transparency in payment times to small businesses

18 May 2020