The Federal Government has announced that small businesses providing goods and services to the Commonwealth will be paid faster, in 20 days rather than 30 for contracts up to $1 million. 

Speaking at the Australian Chamber Small Business Roundtable at Parliament House in Canberra, Prime Minister Malcolm Turnbull said the government “will mandate that by July 2019, all non-corporate Commonwealth entities must pay all invoices for contracts, up to a total value of a million dollars within 20 calendar days - which is more or less 15 business days.”

This will mean that around 95 per cent of invoices of Australian small businesses that work with the Commonwealth each year are paid in 20 calendar days.

The Australian Chamber of Commerce and Industry has welcomed the move.

“This is a major boost to the 6800 small businesses currently providing goods and services to the Commonwealth,” said Australian Chamber Chief Executive Officer James Pearson.

“The faster payments significantly help cash flow, critical for small business success, especially in the early years.

“Small business is the engine room of Australia’s economy and employs millions of Australians. This initiative helps small businesses grow and prosper.”

The initiative is part of the government’s response to the Australian Small Business and Family Enterprise Ombudsman’s report into payment times and practices.

The Australian Chamber also welcomed the government’s announcement that Federal Government agencies will be required to publish their payment time performance, increasing transparency and accountability.

“This increases small business confidence that invoices will be paid in a timely manner and sets an example for others to follow,” Mr Pearson said.

The initiatives were discussed with Prime Minister Malcolm Turnbull at the Australian Chamber Small Business Roundtable at Parliament House in, Canberra, today.

The Australian Chamber hosted 25 small business leaders for a discussion with the Prime Minister on critical issues, including skyrocketing energy costs and reliability, red tape, tax reform and apprenticeships and traineeships.

“Our members appreciated the opportunity to brief the Prime Minister,” Mr Pearson said. “It was a valuable discussion. We look forward to further talks with the Prime Minister and other political leaders."