Australia’s largest businesses will be made to pay invoices to small and medium-sized businesses within 20 days as a condition of future government contracts and disclose the time frame they pay bills to the same businesses every year..
Prime Minister Scott Morrison announced the policy at the Business Council of Australia annual dinner in Sydney on Wednesday night.
In his speech during the dinner, Mr Morrison said that “cash flow is crucial to the health of any business, but especially small business.”
“Although there have been significant improvements, small businesses are still being shouldered with the burden of long payment times.
“We have heard loud and clear from small business owners around Australia and we agree, small business should not be used as a bank.”
Under the changes, businesses with annual turnovers above $100 million will have to publish annually their record of engagement with SMEs, which covers around 3000 businesses included private domestic companies, foreign companies and government entities.
The Federal Government will also help small businesses apply for government work by a commitment to have 35 per cent of all contracts up to $20 million delivered by small business. The current rate is sitting at 10 per cent.