Draft legislation released on 15 April seeks to improve the operation of the Scheme to influence large businesses to improve their payment practices in dealing with small businesses.

Download Submission here

Key amendments are:

 

• Better express the purpose of the scheme

The objects of the act have been expanded and revised to better express the purpose of the Scheme;

The amended objects of the Act are to:

• promote timely payment practices by large businesses, certain government entities and volunteering entities;
• foster a culture of prompt payment practices by those entities to:
• support economic growth; and
• improve outcomes for small business suppliers;
•  encourage those entities to improve their payment terms, times and practices of those entities in relation to their small business suppliers;
• provide for those entities to report on payment terms, times and practices in relation to their small business suppliers; and
• make information reported under the Act publicly available.

 

• Research and analysis to be published

The regulator is being given additional functions to undertake research and publish analysis relating to payment terms, times and practices, and provide data and tools to assist users of the register, to improve the effectiveness of the Act and better achieve its objectives.

 

• Clearer and more effective rules, including
  • Revised criteria and processes for entry and exit of the scheme for reporting entities;
  • Using AASB standards to recognise consolidated business structures, allowing the top entity in a consolidated group to provide a payment times report for that group;
  •  Allowing entities to apply to the Regulator to alter the default reporting arrangements by either having an entity report on their behalf (reporting nominee) or have certain entities within the group report individually (subsidiary reporting entity), as appropriate to the reporting entity’s structure and circumstances.
  • Consolidating Payment Times Report content requirements in the Rules rather than the Act to provide for greater clarity and ease of use for entities who make payment times reports;

 

• Name and shame slow payers

A new power for the Minister to require an entity, that is found to be amongst the slowest payers of small businesses, to publish on their website and other documentation that they are a slow small business payer.

 

• Greater compliance and enforcement

Improved compliance and enforcement mechanisms, including:

• Expanding the information gathering powers of the Regulator by enabling the Regulator to issue a notice to a person to produce documents and provide information to assist in the administration of the Act; and
• Providing that civil penalty provisions in the Act are subject to an enforceable undertakings framework; and
• ensuring the Regulator can effectively investigate and publish on the register an entities non-compliance with the Act; and
• Independent review after 5 years
• requiring that an independent review of the operation of the Act must be undertaken within five years of the commencement of the amendments.

 

Draft legislation and additional information is available here.