Australian government achieves payment targets - eBilling News | EBPP

Australian government achieves payment targets

on Wednesday 25 Jan 2012

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Late payments by government departments are being tackled in Australia, with all of the country's state agencies meeting their payment targets during the last financial year.

According to the Australian Daily Telegraph, every single one of the 40 bodies managed to pay 90 per cent of their bills on time in 2010-11 - the first time this has happened in almost ten years.

However, the newspaper reports that overall 55,000 payments totalling $550m (£371m) were made late, despite a government crackdown on the problem.

The policy, introduced in December 2008, sees government departments incur interest on late payments of up to $1m to small businesses.

It states that should an agency fail to settle an invoice within 30 days of receipt, it will be charged interest on the unpaid amount.

Small business minister Mark Arbib insisted that the legislation had given state departments a "real incentive" to deliver payments on time.

Yet last year, only 60 small businesses were compensated a total of $3863 through the scheme.

Commenting on the figures, MP Bruce Bilson, small business spokesman for the opposition, said: "It's farcical - departments get whacked with a wet lettuce leaf for making late payments worth half a billion dollars when cash flow is a critical concern for small businesses."

If the Australian government were to embrace electronic invoicing, it could make significant progress on eliminating late payments and ensuring that small firms receive their money in a timely fashion.

Towards the end of last year, federal ministers in Australia were facing calls from e-invoicing providers to switch to digital transactions, not only because it could save time and guarantee punctual payments, but also because it could save considerable amounts of money.

Specifically, they claimed that by bringing in mandatory e-invoicing, the government could avoid having to introduce a carbon tax of up to $24 million a year.