Small businesses are being encouraged to give feedback on a draft law that would make larger corporations more accountable on payment times.
The federal government has opened consultation on the draft Payment Times Reporting Framework legislation that will require businesses with turnover of more than $100 million to publish information about their payment policies.
Australian Small Business and Family Enterprise Ombudsman Kate Carnell welcomed the initiative, saying ‘cash flow is king for small businesses’.
“This framework will require big businesses to be upfront and honest about the time it takes to pay small businesses, to help small businesses choose who they supply,” she said.
“The legislation will apply to about 2500 large Australian businesses, including foreign companies and government entities.
“Late payments by large businesses to small businesses account for 53 per cent of all invoices, according to data from Xero.
“That’s $7 billion of working capital that Australian small businesses are missing out on every year – money they could be using to grow their business.
“Small businesses can now provide their feedback on this proposed reform which is designed to drive cultural change in business payment performance across the economy.”
Consultation on the draft legislation is open until 6 March via https://consult.industry.gov.au/