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The passage of reforms to the payment times reporting framework is a welcome development for small business suffering from late and failed payments, says a payment services provider.
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Passage of payment times bill ‘a big win’ for small business
04 July 2024
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Legislation to improve the operation of the payment times reporting scheme has now passed both houses of Parliament after the lower house agreed to amendments by the Senate.
The amendments introduced by the Senate earlier in the week introduce a fast payer list recognising large entities that pay small businesses in 20 days or less.
The reforms also enable the regulator to name and shame large businesses that are slow to pay their small business suppliers.
GoCardless Australia and New Zealand head of sales, Luke Fossett, said the news that payment times reform has successfully passed Parliament is a welcome development for small and medium businesses suffering from late and failed payments.
"It’s good news for big businesses, too, as those that pay their suppliers on time and support Australia's SMBs will now be getting some positive recognition," Fossett said.
The recent Pursuing Payments report by GoCardless revealed that one in five Australian small business owners and decision makers estimate losing between $6,000 and $30,000 from late payments annually.
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"It’s clear that improving payment times is good for local businesses, and we’re hopeful that these reforms will create change," Fossett said.
"This legislation is also important as late payments affect every business, but they also have a disproportionate impact on women, creating an uneven playing field.
"According to our data, 29 per cent of women say they feel uncomfortable asking customers for payment – this rises to almost half (46 per cent) when it comes to chasing late payments. However, only 26 per cent and 40 per cent of men share these sentiments, respectively."
Fossett said helping businesses get paid faster will also benefit employees and the economy more broadly.
Minister for Small Business Julie Collins said the reforms will pressure big businesses to improve payment times by highlighting the best and worst payment performers.
“The passage of this legislation in the Parliament is a big win for Australia’s small businesses," Minister Collins said.
“Being paid on time is a matter of fairness for Australia’s small businesses which is why we haven’t wasted any time passing this legislation after introducing it to the Parliament."
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