Queensland government to pay suppliers within 20 days

The Queensland State Government in Australia is moving to pay its suppliers faster. As of 1 July next year, it will change its payment terms to 20 days from 30 days.

This will bring Queensland in line with the payment policies of the New South Wales and the federal government.

In November last year the Australian federal government announced that as of July this year it would pay its suppliers within 20 days for contracts up to A$1 million.

The government will also develop an annual reporting framework requiring large businesses that have more than A$100 million in turnover to reveal their payment terms and how they engage smaller businesses.This will cover 3,000 of the largest businesses in Australia, including foreign companies and government entities.

In New South Wales, the government has since December started paying its suppliers in 20 days. And it is targeting making payments in five days by the end of this year.

Compared to New South Wales, though, this move by the Queensland government is not deemed to be good enough by Kate Carnell, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO).

Carnell said: “If the New South Wales government can fast-track their payment policy, first to 20 days by the end of this year and then to five days, every level of government can and should do the same.”

Carnell also said big businesses should "step up to the plate" by improving their payment times, instead of the 90 or 120 days which is the standard for some well-known big companies at the moment. She calls that "abuse of market power."

The ASBFEO is pushing for regulated payment terms, and for bigger businesses to disclose their payment terms. We have previously written about a report released by the ASBFEO that found some large corporations are reluctant to reveal the timeframes in which they pay their small business suppliers. It said this lack of transparency is also practised by businesses that have signed the BCA supplier code.

Click here to listen our RIABU's Simon Littlewood and Mark Laudi discuss the benefits, but also the dangers of the new policy.