FASTER PAYMENTS SUPPORTING SMALL BUSINESS

The NSW Government’s Faster Payment Terms policy has paid 97.6 per cent of invoices to small businesses within five days, a new report reveals.

NSW outperforms the private sector, where the average shortest time period for payments to small businesses is 11 days and the average standard is 33 days.

Treasurer Matt Kean said the Liberal and Nationals Government is backing small business by giving them cash flow certainty.

“Faster payments mean our small businesses can get on with the job without worrying about how they’re going to pay for supplies,” Mr Kean said.

“We want our more than 800,000 small businesses to wait fewer than five days for payment; Daniel Mookhey when he was a union official made a small business wait 708 days for payment.”

Mr Kean said some states’ payment policies only commit to payments within 10 days while some were within 30 days.

“This initiative ensures there is more money in the pockets of small businesses owners sooner, allowing them to invest in their business and staff with more certainty,” Mr Kean said.

There were more than 6,600 businesses that invoiced government agencies for payment in 2021-22, of which 97.6 per cent were paid within five days to the value of $338 million.

The latest results are outlined in a review released today of the Faster Payment Terms policy that was implemented in late 2018.

Minister for Small Business Victor Dominello said there are more than 800,000 small businesses in NSW and the NSW Government wants more of them to have the opportunity to provide products and services to government agencies.

“We made a commitment three years ago to pay 80 per cent of small businesses in five days and having achieved 97.6 per cent on five days we are now looking to do even better,” Mr Dominello said.

There are more than 34,000 small businesses registered for Faster Payment Terms.

To further improve payment times the review, conducted by NSW Treasury, in consultation with small businesses and Council of Small Business Organisations Australia (COSBOA), has made 24 recommendations.

The recommendations include:

 Addressing government processes for higher value purchases which means they can take longer to be paid but which have more significant impact on a small business’ cash flow;

 Making it easier for small business to invoice government agencies with a move to standardised invoicing requirements and providing contact points to follow up outstanding payments;

 Raising awareness of Faster Payment Terms and how to comply;

 Expanding uptake to Supplier Hub where small businesses can register as a supplier to government;

 Training on e-invoicing for small businesses.

Treasury will be taking these recommendations forward and will develop an implementation plan in early 2023.