As part of the ongoing efforts to improve the payment times for small businesses, the NSW Government has implemented a Faster Payment Terms policy wherein small businesses are being paid in record time.
Since 2018, when the policy was first implemented, the NSW Government has already paid 97.6 per cent of invoices to small businesses within just five days which was highlighted in a recent report.
In another report, NSW also outperformed the private sector in payment times with an average shortest time period is only 11 days compared to the average standard at 33 days.
Treasurer Matt Kean stated that 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,” Kean said. “We want our more than 800,000 small businesses to wait fewer than five days for payment.”
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-business owners sooner, allowing them to invest in their business and staff with more certainty,” 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.
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 be given 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,” Dominello said.
To date, there are more than 34,000 small businesses registered for Faster Payment Terms.
The Treasury is also working on improving the policy further with the help of the Council of Small Business Organisations Australia (COSBOA), with the hopes of delivering an implementation plan later in the year.
