National

Late payment repeat offenders to be named and shamed

By AAP Newswire

Dec 5, 2023

Small Business Minister Julie Collins. — Julie Collins says businesses failing to pay small firms on time will be named and shamed. -AAP Image

Big businesses failing to pay small firms on time will be named and shamed under a crackdown on late payments.

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But big firms will not have to abide by mandatory maximum payment times, as recommended in an independent review, with the federal government agreeing it would "do more harm than good".

An independent review into the matter suggested a mandatory regime for paying on time could disincentivise large businesses from using smaller suppliers.

Late payments can lead to cash flow problems and weigh on productivity, the review found.

Small businesses are particularly vulnerable as they don't have the market power to negotiate, especially when they are dealing with bigger firms.

Small business minister Julie Collins said the measures would level the playing field for smaller firms.

"This is a matter of fairness – big businesses should not take advantage of Australia's 2.5 million small businesses by failing to pay them on time," she said.

Central to the government's plan is making the best and worst payers public.

Other changes include considering payment times in government procurement and other public sector policies, and lightening the regulatory burden for entities reporting under the Payment Times Reporting Scheme.

More than $8 million will be funnelled into the measures aimed at easing pressures on small businesses.

By AAP Newswire

Australian Associated Press