Businesses that provide goods and services to the Government will get the benefit of a ‘pay on time or pay interest’ approach from tomorrow.
For contracts valued up to $1 million, the new policy will automatically pay interest on correctly rendered and unpaid invoices after 30 days, down from the previous 60 days. This change will particularly benefit small businesses.
Previously, small businesses had to apply to receive interest for invoices that were between 30 and 60 days late.
The Government understands the importance of cash flow for small businesses, so in keeping with our election commitment, we have made this important change.
Small business shouldn’t be left waiting for payment. While around 95 per cent of invoices are paid within 30 days, where we are late, we want small businesses to be appropriately compensated.
Under the policy, interest will be applied at the Australian Taxation Office’s General Interest Charge.
