Kristy and Dr Emerson have had direct conversations about the behaviour of both private and public sector clients withholding payments for services already provided.

Just one member story conveyed to Dr Emerson was of a government client that refused to pay the $5,000 owing on a completed contract – one which had been signed before work commenced –until the business signed a new 100-page contract. “For that business, the cost of legal services to review the contract outweighed the value of the completed work,” she says.

Consult Australia also communicated how the internal processing time taken by clients is not usually counted as part of the ‘payment time’.

“It is not unusual for internal processes to take a month or more before the request for payment is approved and the process of actual payment begins,” Kristie notes.

These case studies will be highlighted in Consult Australia’s written submission to the review. If you would like to share any additional stories, you can do so confidentially to bolster our advocacy in this area. Please contact Kristy for further information.

The Payment Times Reporting Act 2020 (Cth) requires large businesses and certain Commonwealth government enterprises (but not all government clients) to submit payment time reports every six months. The reports include information on standard payment terms, actual payment performance, and the use of supply chain financing arrangements. The intent of the legislation was to provide transparency for small businesses dealing with larger businesses and to generally encourage more efficient payment times across all sectors.

At the time of introducing the Act, the government acknowledged that drawn-out payment times are detrimental not only to the business awaiting payment, but also the economy. The government also acknowledged that payment times greater than 30 days are ‘long’ – but did not mandate any set payment time into the Act.

At the time of introduction, Consult Australia and other advocates for small business noted that, without a mandated time, it would be difficult to realise any change in the way small businesses are treated. Consult Australia called for (and continues to call for) the Act to cover all government clients because the majority of our small business members do not work directly to Commonwealth government enterprises but instead to state and territory governments (as well as local government).

Remember, you can share your business pains (and maybe even wins against bad behaving clients) in our regular Small Member Open Forums, which we hold every eight weeks. Join us for the next one on Wednesday 5 April, 12-1pm (AEST). Look out for the calendar invite in late March or contact the team at info@consultaustralia.com.au.