20 days to pay: Turnbull takes lead on small business payment reform

By Tom Watson · · 2 min read
Fact Checked
Advertiser disclosure

If you thought the wait for your pay cheque was bad, spare a thought for Australian small business owners who were found to have to wait an average 25 days past the due date to receive payments for services according to data from a recent Inquiry into Payment Times and Practices.

Thankfully the tide may be turning to give small businesses greater access to cash, with Prime Minister Malcolm Turnbull announcing on Wednesday that the federal government will be required to pay invoices up to $1 million within 20 calendar days - down from the government's current 30 day policy.

With over 6,500 small businesses currently working with the federal government, Mr Turnbull said the change would help put more money back in pockets.

"It demonstrates the government's continued commitment to small business, the engine room of employment in Australia,” he said.

"The government is already a proud leader in terms of payment times and practices, with the latest pay on-time survey showing Commonwealth agencies paid 97 per cent of their invoices within 30 days."

While the move will only apply to contractors with the federal government for now, Mr Turnbull also hoped big businesses would be encouraged to follow suit.

RELATED: Delays in financing is stunting growth for Aussie small businesses, GetCapital research finds

The government's shift in policy comes in response to calls for change from the Australian Small Business and Family Enterprise Ombudsman following its Inquiry into Payment Times and Practices released in April.

The Inquiry reported that Australia’s payment practices were falling well behind other nations, and that action needed to be taken in order to curtail the growing trend of late payments, which it found were limiting growth and raising costs for businesses.

Small Business and Family Enterprise Ombudsman Kate Carnell welcomed the announcement  from the federal government, describing it as a ‘game changer’ for small business.

“Cash flow is king for small business and this will make a huge difference,” she said. “It will save money on interest payments, boost confidence and free up capital for reinvestment.”

Looking for a financing solution for your own small business? Check out Mozo’s business banking hub to compare a range of business credit card options, or check out some top business loans below:

Business Loans

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can search our database of 100 products
Last updated 27 July 2024Important disclosures

Refine the list of business loans

Let’s help find you a great business loan...
  • About Bizcap
    Unsecured Business Loan

    Business Loans from $5,000 to $5,000,000 with high approval rates. Access to funds on loans up to $500,000 in as little as 3 hours. Cash flow friendly repayments and open minded offers.

    Interest Rate
    Upfront Fee
    Funding speed
    On Application
    3%, starting at $399
    from 3 hours
    Go to site
    Details
  • About Prospa
    Prospa Plus Business Loan

    Prospa uses risk-based pricing to determine your interest rate. They look at factors including your industry, years in business, cash flow, creditworthiness and the overall financial health of your business.

    Interest Rate
    Upfront Fee
    Funding speed
    Interest rates vary based on risk.
    3.5%
    from 24 hours
    Go to site
    Details
  • About Lumi
    Unsecured Business Loan

    A straightforward business loan with no hidden Lumi fees or charges. Speedy application and approval process with fast access to funds according to Lumi.

    Interest Rate
    Upfront Fee
    Funding speed
    from 9%
    -
    Within same day
    Go to site
    Details

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.