SMEs to win late payment rights – but when?
Tuesday, February 12, 2008/
Federal Government departments will come under greater pressure to pay amounts owed to small business creditors within 30 days under a proposal announced by Small Business Minister Craig Emerson yesterday.
Under the proposed laws, which will be based on a private member’s bill introduced by Emerson mid last year, Government departments will face penalties and be required to pay interest if they fail to pay bills within 30 days.
Despite the fact that the core of the legislation has already been drafted, Emerson has not committed to a timetable for the introduction of the laws, with his spokesman only able to confirm that they will be brought to Parliament “in due course”.
While Emerson will take further advice on the drafting of the laws, a spokesman says at this stage they would retain a $2 million revenue cap on the size of businesses able to claim interest payments included in the original bill.
The amount of interest small businesses will be able to charge is likely to be equal to the statutory General Interest Charge rate, which is currently set at 13.37% per year, or 0.03663014% per day.
Small business advocates have previously called for laws that would give small businesses a statutory right to charge interest or levy a penalty on big business creditors as well as Government departments, but both Emerson and the previous minister Fran Bailey ruled out any change in that direction.
Laws to implement its first tranche of industrial relation changes, to establish national statutory authorities to deal with skills and infrastructure and to implement personal tax cuts promised before the election are expected to top the Rudd Government’s agenda during the first sitting of Parliament.