The NSW Faster Payments Policy has expanded its reach with larger companies with NSW government contracts now obliged to pay their small business suppliers in 20 business days.
The pilot program which runs until June follows on from the government’s 2018 commitment to pay small businesses directly contracted by the government in five business days.
Fast-tracked payments to ease cash flow issues
Australian Small Business and Family Enterprise Ombudsman Kate Carnell has commended the new pilot program that will see some small business subcontractors get paid in 20 business days.
“This trial, which extends the existing faster payments policy to ensure larger companies with NSW government contracts pay their suppliers in 20 business days is very encouraging,” Carnell says.
“Fast-tracking payments to small businesses is the best way to help them recover after what has been an incredibly tough 12 months. This initiative will benefit small business suppliers and will also flow through to the broader economy”
Late payments still a problem
Carnell said small businesses, particularly those hit hard by COVID are in urgent need of good cash flow.
“The latest CreditorWatch data shows businesses are being paid on average 26 days overdue, which is absolutely devastating for them and highlights the importance of paying small businesses on time.
“The NSW Government’s faster payment program for small business suppliers should be considered the benchmark for governments at all levels. If NSW can do it, there is no reason why it can’t apply across the board.
“Big businesses should also be doing the right thing by their small business suppliers by paying on time and ensuring they are complying with the Payment Times Reporting Scheme which came into effect on 1 January, 2021,” Carnell concluded.
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