Framework to ensure small businesses paid on time

The federal government is introducing a new national large business reporting framework.

This new framework aims to facilitate annual reporting of large business payment times to small business suppliers, in order to encourage fairer and faster payment times and terms for small businesses.

Trade between small, medium and large businesses totals more than $550 billion a year in Australia. There is international evidence that reducing long payment times to small business can make the SME sector more resilient by improving cashflow and boosting employment and wages.

To address this issue, the government announced on 21 November 2018 that it would introduce a new national large business reporting framework.

The framework will require large businesses with over $100 million in turnover to publish payment information on how they engage with small businesses. It will cover 3000 of the largest businesses in Australia — including foreign companies and government entities.

The Department of Jobs and Small Business will consult with the large and small business sector over coming weeks to develop the design and implementation of the scheme.

Working together with stakeholders from the large and small business sector is integral to the successful design of the scheme. Throughout February, those interested in the development of the scheme will be invited to give feedback on the way in which the reporting information is collected and reported. The national consultation process will be supported by economics analytics firm AlphaBeta.

Consultation will include an online discussion paper to be released in February and a series of industry roundtables and workshops. The Department of Jobs and Small Business is particularly interested in hearing from large and small businesses in regional areas. It also invites feedback from data users and credit reporting agencies on how the reporting and publication of data could be designed to maximise data innovation.

Image credit: ©stock.adobe.com/au/daviles

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