Australia’s large businesses will have to report publicly on how and when they pay their small business suppliers under a federal scheme coming into effect on January 1.
The Payment Times Reporting Scheme rules will require businesses with a total annual income of more than $100 million to detail their small business supply chain financing arrangements, such as reverse factoring.
Minister for Employment, Skills, Small and Family Business Michaelia Cash said small businesses would for the first time have the opportunity to find out how large businesses paid their small business customers.
“Shining a light on large business payment performance will lead to fairer and faster payments for Australia’s 3.5 million small and family businesses,” Senator Cash said.
“I welcome the recent decision from major contractor CIMIC Group to move to 30-day payment terms for its small business suppliers next year when the Morrison Government’s Payment Times Reporting Scheme comes into effect.
“This clearly demonstrates the role transparency and community expectation have in enforcing faster and fairer payment practices.”
After an initial 12-month transition period, civil penalties will apply to reporting businesses that fail to report or give the Payment Times Reporting Regulator a false or misleading report.
For more information about the scheme visit industry.gov.au/regulations-and-standards-payment-times-reporting-scheme.