New Laws Put Pressure on Big Businesses To Pay Small Suppliers
New laws in parliament today will place pressure on big businesses to pay smaller suppliers on time, seeking to prompt a lift in cashflow for smaller entities following the coronavirus pandemic.
The initiative forms part of the Australian government’s push to prevent a national recession.
“Now it’s time for big business to step up,” said Industry Minister, Karen Andrews in parliament today.
It comes as late payments continue to plague smaller businesses, with many uncertain if they’ll stay afloat from the economic impact of COVID19.
New laws will mandate big businesses report on how fast they’re paying smaller suppliers.
Should laws pass parliament, businesses who receive over $100 million a year will be tasked with reporting their progress every six months, commencing January next year.
Late payments are considered an enduring problem for Australia’s 3.4 million small businesses.
The Australian government is expected to announce a multi-billion package to ride out an economic downturn in coming days.
It comes as Prime Minister Morrison addresses major industry leaders at the AFR Business Summit in Sydney today, with the government’s package aimed at supporting new investment, declining cashflow pressures for vulnerable companies and increasing local spending.
The speech is expected to encourage big businesses to take a corporate responsibility and pay smaller suppliers early or on time, as the country seeks to unite and prevent an economic recession.