Small businesses across Victoria will be better off under the new Australian Supplier Payment Code launched by the Victorian Government and the Business Council of Australia (BCA).
Victorian Minister for Small Business, Innovation and Trade Philip Dalidakis and BCA CEO Jennifer Westacott unveiled the new nation-wide voluntary code on 29 May.
Under the code, businesses will commit to paying their small suppliers within 30 days of receiving a tax invoice and not change the settlement period without a valid reason.
The Andrews Labor Government has been leading fair payment reform. Just a year after it first raised the issue with the Federal Government, the Victorian Government announced it would launch an Australian first Victorian Fair Payment Code from 1 July this year.
However, after consultation with businesses and the public, Victoria seized the opportunity to provide national leadership and partnered with the BCA to see the code expanded beyond our borders to all of Australia.
“This code is proof that when the small and large business communities work together with government then we can achieve results that benefit everyone,” said Ms Westacott.
The in-depth consultations, led by the Victorian Government, found small businesses face a range of issues caused by late payments including reduced growth, cash flow problems and barriers to creating jobs.
“Small businesses deserve to be paid fairly and on time. They are not there to be used as a line of credit or as part of another business’ cash flow strategy,” said Mr Dalidakis.
The guidelines of the new national code will make it easier for small and large businesses to communicate with each other, resolve disputes quickly and encourage fair payment practices.
Numerous Victoria based companies have already signed the code, and many more have signalled their intention to in the near future.
The Australian Supplier Payment Code will come into effect from 1 July and is open to all businesses, industries and governments. Signatories will have 18 months from the signing date to reach full compliance.
Victoria’s more than half a million small businesses account for 97 per cent of the state’s business sector and close to half of all private sector jobs.