Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell has welcomed the NSW government’s commitment to pay small businesses within five days.
The change is due to come in by the end of 2019.
“If the NSW government can fast track their payment policy, first to 20 days by the end of this year and then to five days, every level of government can and should do the same,” Ms Carnell said.
“Last year, ASBFEO, in partnership with the small business commissioners in NSW, Victoria, South Australia and WA, and the Council of Small Business Australia, conducted an inquiry into payment times and practices in Australia.
“The inquiry found late payments and extended payment terms is a big issue for small businesses, and that governments have a key role in leading by example.
‘Cashflow is king’
“Cashflow is king,” Ms Carnell said. “A lack of cashflow is the leading cause of business insolvency. This underscores the importance of prompt payments.
“Last week, a Xero report showed late invoice payments were at their worst in June. This is simply not acceptable.
“If you want the economy to grow, you’ve got to get the dollars moving. The right way to do this is to pay small businesses quickly.
“Big business should also step up to the plate with faster payment times, instead of the 90 or 120 days we see from some well-known big companies at the moment. That is abuse of market power.
“We’ll continue to apply pressure to ensure small businesses get a fair go from all levels of government and big business.”