Small businesses are vulnerable to late payments. To address this, the federal government has released a new review of the Payment Times Reporting Act 2020.
The review highlights how faster payments can reduce financial burdens for small businesses and, as a result, support higher wages and profits. This has a direct impact on the economy by increasing employment and economic opportunities.
The current Payment Times Reporting Scheme, originally designed to hold large businesses and government agencies accountable for their payment terms and practices in regards to small businesses, does not incentivise prompt payments. It also includes unnecessary regulatory burdens that can compromise the accuracy of the reporting scheme, according to the review.
The new report makes 14 recommendations that the federal government has taken under consideration. In the meantime, the Minister for Small Business has asked the Treasury to immediately proceed with any changes to existing guidelines and operational processes.
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