Federal Independent Contractors and Small Business Minister Craig Emerson said yesterday that federal government agencies would be required to make on-time payments for new small business contracts of up to $1 million.Emerson said the payments for contracts of up to $1 million must be made within 30 days, otherwise small business would have the right to charge penalty interest. He said the aim of the move was to ensure contractors were paid on time to ensure they were in a better position to maintain their cash flows. “This is critical at any time but even more so in the difficult economic times created by the global financial crisis,” he said. “More than 90% of invoices are paid on time by Commonwealth agencies, but that’s still not good enough.” Emerson said the start-up of the on-time payment system followed the agreement reached at the Council of Australian Governments meeting last Saturday to simplify business regulation in 27 different areas affecting small and larger businesses.
