Submission to the Payment Times Reporting Act 2020 primary legislation amendments

30 May 2024

The Business Council of Australia (BCA) welcomes the opportunity to provide feedback on the Payment Times Reporting Act 2020 primary legislation amendments. The proposed changes will improve the Payment Times Reporting Scheme (PTRS) by reducing the regulatory burden and removing many of its inefficiencies.

Simply put, maintaining the status quo for the PTRS is not an option. The issues with the current scheme are not in the interests of any stakeholder – be they small business, large business, government, or other users of the data.

BCA member companies support the payment times reporting framework to improve transparency of payment times to small business. The PTRS complements the voluntary commitments to fast payment through the BCA’s Australian Supplier Payment Code (ASPC). The ASPC is an industry-led voluntary commitment to pay small business suppliers within 30 days and on time, with over 150 signatories.

Small businesses play a critical role in their communities and across supply chains. That success relies on invoices being paid quickly, in full and on time. The PTRS should be able to shine a positive light on large businesses that are paying small businesses promptly. It puts companies that are unfairly extending payment times to small business suppliers under the spotlight and puts pressure on those businesses to change their practices. Central to this is simple, accessible, and useful data, which in turn can reduce compliance costs.

The evidence is clear – payment terms and practices have improved across the two and a half years of available PTRS data. This has come at a time of enormous disruption, including natural disasters, the COVID-19 pandemic, lockdowns/restrictions, supply constraints, logistics challenges, delivery delays, record high job vacancies, and elevated staff turnover. Having payment practices and performance data in the public domain has encouraged many businesses to seek to improve through strong reputational incentives to improve payment times in response. The BCA is committed to further engagement to improve payment times, including working with the Payment Times Reporting Regulator and Australian Small Business and Family Enterprise Ombudsman.

The BCA welcomed the review of the PTRS driving these proposed changes. The initial changes made by the regulator to improve compliance around credit card transactions and correct the Small Business Identification Tool are welcome. The broader response to the review should be guided by the review’s principles that the PTRS:

  • Incentivises improved payment terms and practices and disincentivises poor behaviour.
  • Imposes a proportionate regulatory burden.
  • Is accessible and useful.

The BCA urges the government to use these reforms to the PTRS as an opportunity to further overhaul the scheme and unlock its full potential. This includes significant improvements to the Small Business Identification Tool (such as through use of Australian Taxation Office data and real-time identification of small businesses e.g. through an Application Programming Interface Tool), consolidating reporting fields to reduce compliance costs and improve data accessibility, driving the uptake of eInvoicing, and extending reporting to governments. These are discussed further in the BCA submission to the Statutory Review of the Payment Times Reporting Act 2020.

The brief consultation period for these proposed changes however means many potential issues may not have been identified. It is critical that sufficient time and a genuine consultation process is conducted around the proposed rules that will determine the key reporting aspects of the revised scheme. Companies have undertaken significant investments to meet their reporting obligations under the existing regime. The proposed changes are due to commence imminently. Despite the proposed transition period, companies will need sufficient time to update systems and processes to ensure they are compliant with the revised scheme and that compliance costs are minimised.

You can read our full submission here


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