On 6 December 2022, the Australian Government announced an independent review of the Payment Times Reporting Act 2020 (the Act) and released the terms of reference for the review.
Under the Act, which commenced on 1 January 2021, large businesses and government enterprises (known as reporting entities) must submit payment times reports to the Payment Times Reporting Regulator (the regulator) every 6 months. This includes information on their standard payment terms, actual payment performance, and the use of supply chain financing arrangements.
The regulator maintains these reports on the Payment Times Reports Register, which is available on the Payment Times Reports Scheme website.
The review is initiated under section 57A of the Act. Under section 57B of the Act, the review must consider the:
- Efficacy of the Act in meeting its objectives (to enable small businesses to make informed decisions about potential customers and create an incentive for reporting entities to improve their payment times).
- Impact of related government policies (for example, eInvoicing) on the payment terms and practices of reporting entities.
- Effectiveness of other policy measures (including mandatory payment times) to improve payment terms and practices for small businesses.
The terms of reference also require that the review consider the efficacy of international approaches to improving payment times for small businesses and make recommendations on arrangements that ensure small businesses are paid on time.
The Hon Dr Craig Emerson, an eminent Australian economist with a distinguished career in Government, has been engaged to conduct the review. Dr Emerson will be supported by a small secretariat in Treasury.
The review will include a public consultation process that will provide all interested parties with opportunities to contribute to the review.
A written report will be provided to the Government by 30 June 2023.