The House of Representatives has passed the Payment Times Reporting Amendment Bill 2024, a significant step forward in the Albanese Labor Government’s commitment to improving payment times for SMEs.
This reform, backed by $33.4 million in new funding, aims to deliver a much-needed shot in the arm for small businesses by ensuring faster payments, streamlining processes, and reducing administrative burdens.
This reform, backed by a $33.4 million investment, tackles a major pain point for small businesses by:
- Ensuring Faster Payments: Improved cash flow will strengthen the financial health of SMEs.
- Streamlining Processes: Reduced administrative burdens free up valuable time and resources.
- Empowering the Regulator: The Payment Times Reporting Regulator gains the tools to enforce compliance and incentivize timely payments across the board, including public recognition of the best and worst payment practices.
Benefits for All Stakeholders
This legislation responds to the 2023 Emerson Review and underscores the government’s dedication to improving payment times for SMEs. Faster payments benefit everyone in the Australian economy, leading to:
- Increased Productivity: Improved cash flow allows businesses to invest more in operations.
- Higher Wages and Profits: A healthier business environment supports growth and prosperity.
- Expanded Employment Opportunities: Increased economic activity can create new jobs.
Luke Fossett – General Manager, GoCardless ANZ said: “The news that payment times reform has successfully passed the House of Representatives is welcome news for all SMBs suffering from late and failed payments. We’re optimistic and hopeful that this proposal will now pass the Senate and be put into action. Our recent Pursuing Payments report revealed that one in five Australian small business owners and decision-makers estimate losing between $6,000 and $30,000 from late payments annually. It’s clear that improving payment times is a net good for local businesses, and we’re hopeful that these reforms pass the Senate.
This legislation is also important as late payments affect every business, but they also have a disproportionate impact on women, creating an uneven playing field. According to our data, 29% of women agree they’d feel uncomfortable asking customers for payment – this rises to almost half (46%) when it comes to chasing late payments. However, only 26% of men feel uncomfortable asking for payments and 40% share this experience chasing payments.
“Late payments have also created a generation gap across SMBs. Three in five (62%) of millennial business leaders agree they’d feel uncomfortable chasing late payments, compared to 40% of Gen X and 36% of Baby Boomers. The bottom line is bringing equity back to business will create net benefits for the businesses themselves, but also their employees and the economy broadly – and this legislation is a massive step in the right direction.”
Additional Support for Small Business
The Payment Times Reform Bill is just one of the ways the Albanese Labor Government is backing Australian SMEs.The recent Budget’s Small Business Statement outlines over $640 million in targeted support to:
- Ease pressure on small businesses.
- Foster growth.
- Level the playing field.
Minister for Small Business Julie Collins MP welcomes the progress said:”Labor is committed to ensuring small businesses are paid on time. The House of Representatives passing this legislation is a major step forward,” said Minister Collins. “We encourage the Senate to back this crucial bill, which will benefit businesses, workers, the economy, and Australia as a whole.”
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.
