CORMANN ORDERS GOVT TO SPEED UP SUPPLIER PAYMENTS

The federal government has told all its departments and agencies to pay suppliers more quickly than they are doing, and says invoices for less than $10,000 must be paid immediately.

Finance minister Mathias Cormann has instructed agencies to pay well within the current 20-day terms, said electronic invoices must be paid within five days, and told procurement managers to pay invoices for less than five figures straight away by card payment.

Cormann said, “This will assist businesses with their cash flow and support jobs. The government will continue to look for opportunities to provide support to the Australian economy and to keep businesses in business.”

The finance minster told Commonwealth departments and agencies to work collaboratively with suppliers to ensure business continuity, and take action to ensure supply chains are maintained. Cormann said this would include, “Relaxing or waiving some contractual rights where appropriate to address Covid-19 circumstances; generally avoiding exercising of termination rights or liquidated damages; or revising payment arrangements.”

Hailing the edict as “great news”, PVCA CEO Andrew Macaulay said, “For the first time in more than a decade, the government is looking seriously at its procurement policies."

Cashflow is a major issue for SMEs, which includes the majority of print businesses. The small business ombudsman Kate Carnell is currently pushing government for legislation that would force big business to pay small business within 30 days maximum term.

Macaulay said, “Where the feds can help is to cut red tape, ensure big businesses cannot abuse lines of credit to small-business suppliers, and ensure government procurement is made on a whole-of-cost basis – this means ensuring taxpayer money is spent in a way that benefits our economy, and not someone else’s."

Referring to the whole-of-cost comment, Macaulay said the association is getting traction on both sides of Parliament, from both government and opposition, for its campaign to bring government print procurement back to Australia.

The PVCA together with AMWU and Marvel Binding launched a campaign to bring back the $150m-$200m of government print currently filling Chinese and other overseas presses. A petition that attracted in excess of 4000 signatures went to the deputy prime minister Michael McCormack, resulting in a request for a written submission.

The government’s Covid-19 procurement policy note can be read in full on the Department of Finance website.