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01 October 2021

Ombudsman welcomes faster payment times for small business sub-contractors

Businesses with Commonwealth government contracts will have to pay their small business sub-contractors within 20 days or risk fines and penalties under new laws starting today, says the Australian Small Business and Family Enterprise Ombudsman, Bruce Billson.

“Fair payment times are incredibly important for the viability of small businesses, and I welcome the beginning of this significant policy,” Mr Billson said. 

Under the Payment Times Procurement Connected Policy introduced by the Federal Government, large businesses with Commonwealth government contracts of over $4 million are required to pay their small business sub-contractors of up to $1 million within 20 calendar days or pay interest.

Importantly, they must also take reasonable endeavours to ensure smaller businesses throughout the supply chain of their contract are paid on time by other sub-contractors.

Under this policy, where disputes arise, small and family businesses will now be able to lodge a complaint through the Treasury at ptpcp@treasury.gov.au

Businesses can also contact the Australian Small Business and Family Enterprise Ombudsman for guidance and support on how to navigate the process at https://portal.asbfeo.gov.au/dispute or https://www.asbfeo.gov.au/contact-us

“Challenging large businesses payment practices can be daunting for smaller businesses. I always encourage an initial conversation between the parties to try to resolve a dispute,” Mr Billson said.

“But if this is difficult, my Office is here to provide support and guidance to try to resolve your dispute.”

The Australian Small Business and Family Enterprise Ombudsman’s website www.asbfeo.gov.au has a more detailed fact sheet on the Payment Times Procurement Connected Policy and the ‘5 steps to resolve your dispute’ tool to assist with ways to manage this process.