Ombudsman Kate Carnell has welcomed the Queensland government’s commitment to faster payment terms for small businesses.
Ms Carnell has also urged other states and territories to follow suit, after expressing disappointment that it took so long.
“A reduction in invoice payment times from 30 days to 20 days is to be commended,” she said. “Although it’s disappointing it couldn’t be achieved before July 1 next year.
“The federal government has committed to reducing payment times to 20 days by July 1. And down to five days for small businesses that adopt e-invoicing next year.
“Last year, the NSW government fast-tracked its payment policy to 20 days and committed to five days by the end of 2019.
“If they can do this for the small business sector, other states and territories should do the same.
“Queensland has made a step in the right direction. Together with a commitment to help small businesses gain better access to government procurement, the engine room of their economy will prosper and grow.”
‘Cash flow is king’
According to the ASBFEO’s ‘Access to Justice Inquiry’, payment times and terms were the biggest cause of disputes. In addition, its ‘Review of Payment Terms, Times and Practices’ report in April found a trend of payment times being extended beyond usual standards.
“Cash flow is king,” Ms Carnell said. “And a shortfall in cash flow is the leading cause of business insolvency, which underscores the importance of timely payments.
“Big business should also step up to the plate with faster payment times, instead of the 90 or 120 days we see from some big companies at the moment. That’s abuse of market power.
“We’ll continue to apply pressure to ensure SMEs get a fair go from all levels of government and big business.”