The Victorian Government has made an ongoing commitment to pay all invoices to its suppliers of products and services within 10 business days of receiving a correct invoice.
Minister for Small Business Jaala Pulford announced that the reforms to the government's Fair Payment Policy will apply to contracts under $3 million that are entered into from 1 January 2021.
This guarantee will provide much-needed relief and cash inflow to SMEs with government contracts.
The payment terms in the Fair Payment Policy had previously committed to paying all invoices within 30 days, in line with the Australian Supplier payment code. The Andrews government had temporarily reduced that time frame to 10 days in response to the coronavirus (COVID‑19) pandemic.
What is the Supplier payment code?
The Supplier payment code was developed by the Business Council of Australia (BCA) in collaboration with the Victorian Government. It came into effect in 2017.
The voluntary code commits signatories to pay all invoices within 30 days, with the intention that this will strengthen the economy by helping businesses improve cash flow. According to BCA, 'Paying small business suppliers on time is critical to easing stress, supporting their ability to expand, keep healthy cashflows and employ more people.'
The Victorian Government is the only Australian state government that is a signatory to the code.