New payment bill will protect small business: IPA
A new bill which will require businesses to publish policies including payment times would go a long way to helping small businesses struggling with cashflow, according to the Institute of Public Accountants (IPA).
The Payment Times Reporting Bill 2020 and Payment Times Reporting (Consequential Amendments) Bill 2020 were now before Parliament, which would require business with over $100 million turnover to publish their policies on payment times.
Andrew Conway, IPA chief executive officer, said the IPA’s submission to the Senate Education and Employment Committees highlighted areas to be addressed, which included the recommendation that legislation should have maximum payment times, preferably 30 days or less.
“Without a prescribed period of time, there will be room for ambiguity or arbitrage which can be easily exploited by large businesses,” Conway said.
“The bill prescribes the creation of a Payment Times Reporting Regulator which will be a senior executive employee in the department.
“As is the case with other regulators, we advocate that this role should be adequately resourced to instil the importance of the role and to ensure it is effectively meeting the requirements of the function.”
Conway said one of the most pleasing things about the proposed legislation was the penalty regime, which would have penalties that were sufficient enough to drive the behavioural change required.
“Some large businesses use excuses such as inaccurate invoicing, missing invoices or make changes to contract terms and conditions – anything to extend payment times,” Conway said.
“It is essential these practices change and if the legislation is successful in bringing this behavioural shift, then the flow-on benefits to small business will be realised.”
Recommended for you
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.
