The Commonwealth Government is committed to encouraging fairer and faster payment times and terms for small businesses.
The 3.4 million small businesses employ around 6 million Australians which is around half of all business employment. There is international evidence that reducing long payment times to small business can make the small business sector more resilient by improving cash flow and boosting employment and wages.
To address this issue, the Commonwealth Government announced late last year that it would introduce a new Payment Times Reporting Framework.
The framework will require large businesses with over $100 million in annual turnover to publish payment information on how they engage with small businesses. It will cover around 2,500 of the largest businesses in Australia – including foreign companies and government entities.
The framework’s overall goal is to improve payment outcomes for Australian small businesses. To achieve this, it has three objectives:
- Improve the collection of information about the payment practices of large businesses and government agencies towards small business.
- Make information about payment practices visible and easily accessible to small businesses and other interested stakeholders.
- Limit the compliance and administrative burden associated with the reporting framework for government agencies, large and small businesses.
The process to develop the Payment Times Reporting Framework (PTRF) is well advanced.
Since early 2019, the Department has engaged with over 390 businesses, industry organisations and small business representatives and is thankful for the industry engagement and the valuable feedback received. This feedback has been integral in the design of the framework to date.
The most recent round of stakeholder consultation was held in November and December 2019. Through this process stakeholders were invited to attend consultation workshops in Perth (15 November) and Sydney (26 November), and participate in one-on-one meetings.
Stakeholders were also invited to lodge written submission to a Stage 2 discussion paper. This submission process closed on 2 December 2019.
For information on the issues explored through earlier consultation, you can refer to the Stage 1 discussion paper.
The department will continue consulting with stakeholders to progress implementation of the Framework. If you would like to subscribe for updates as the Department progresses this work, please fill in the form below or email PaymentTimes@employment.gov.au.