16 July, 2012

Government introduces changes to contract payment process

The Federal Government is due to begin paying interest due to SMBs resulting from outstanding payments in an effort to encourage timely invoice payments by government agencies. The changes will see small businesses being paid automatically in cases where the interest owed is between $10 and $1 million. Minister for Small Business, Brendan O’Connor, would like to see the current figure of 98% for on time payment of contracts between small business and Commonwealth departments improved upon. Interest will be calculated using the general interest rate of the Australian Taxation Office, which is 11.37 percent currently.

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