The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has welcomed the Victorian Government’s commitment to pay its small business supplier invoices within 10 business days.
Ms Carnell says the new payment terms, which will apply to all new contracts valued under $3 million from 1 January 2021, is exactly what small businesses need as they recover from months in lockdown and severe trading restrictions.
“Fast-tracking payments to small businesses is a sure-fire way to help them get back on their feet following what has been an incredibly tough year,” Ms Carnell says.
“The Victorian Government’s new small business payment policy will also flow through to the broader economy, by getting money moving again.
“We know that small businesses, particularly those hardest hit by the COVID crisis, urgently need cash flow.
“The latest CreditorWatch data for October shows businesses are being paid an average of 31 days overdue – an increase of 157% on this time last year. This is having a devastating impact on small business, which highlights the importance of paying small businesses on time.
“This should be seen as a benchmark for governments at all levels. If Victoria can do it, there’s no reason why it can’t apply across the board.
“Big businesses should also do the right thing by their small business suppliers and pay them faster. Too many big businesses have used the COVID crisis as an excuse for poor payment times, which is clearly unacceptable.”