If elected in March 2018, a Marshall Government will ensure automatic penalties are made payable to businesses so that government departments are held responsible for their failure to pay bills on time.
Businesses continually complain about the late payment of bills by South Australian Government departments.
Prompt payment is vital for small and medium-sized enterprises in particular, although there is no excuse for government departments not to pay invoices submitted by all businesses on time.
The national Small Business Ombusdman, Kate Carnell, recently disclosed that the Weatherill Government had $470 million in outstanding payments by its departments, most of them overdue by over 30 days and a large number by more than 60 days.
SA Health alone accounted for $200 million of the outstanding payments.
Each year the South Australian Government spends more than $4 billion on buying goods and services for its departments and agencies.
If this isn’t done efficiently, the rest of the economy pays the cost.
The cashflow problems caused to small businesses by late payments are significant. Often, it means small businesses have to delay wages to their own staff and payments to their suppliers.
While penalty interest is payable by government agencies for late payments, many businesses consider the amount so small and the bureaucratic procedures applied to seeking it so cumbersome that the effort just isn’t worthwhile.
The State Liberals' Plan
If elected in March 2018, a Marshall Government will ensure automatic penalties are made payable to businesses:
- for any contract worth up to $1 million
- where the amount has been outstanding for more than 60 days
- where there is no dispute over the correctly rendered invoice; and
- where the penalty interest exceeds $10.
We will incorporate these measures into a Payment Code.
A Marshall Government will also require each Cabinet Minister to report publicly on monthly bill payment performance.