Business NSW Central Coast has welcomed new support measures for small businesses announced as part of the State Budget.
Large businesses which contract with NSW Government agencies for goods and services contracts valued at more than $7.5M will be required to pay small business subcontractors within 20 business days, following the success of a pilot program earlier this year.
“Payment delays by larger businesses have been a great frustration for small business owners and we have seen small businesses miss out on providing valuable services because of this,” Business NSW Central Coast Regional Director, Paula Martin, said.
“It is good to see that governments have recognised how important it is for small business to be paid quickly once the work is complete.
“This change will provide much needed confidence for small business to consider and apply to be part of the supply chain of larger projects being delivered across NSW.
Minister for Finance and Small Business, Damien Tudehope, said the Small Business Shorter Payment Terms Policy would support the important role small businesses play in the NSW economy.
“There is a growing focus on the payment performance of large businesses to small businesses and it is vital the NSW Government leads the way, in particular as the small business sector continues to recover from the impacts of COVID-19,” Tudehope said.
The new policy builds on the State Government’s existing Faster Payment Terms Policy, under which payment times for small businesses directly engaged by the NSW Government were cut from 20 days to five days in 2020.
It also complements the Federal Government’s Payment Times Reporting Scheme which requires certain large businesses with a total annual income of more than $100M to publicly report on their payment terms and practices to their small business suppliers.
“This is about ensuring small businesses are paid quickly, making it easier for them to pay staff and bills without the stress of not knowing when the next cheque will come in,” Tudehope said.
The Budget also includes a refreshed Small and Medium Enterprise (SME) and Regional Procurement Policy.
The policy was introduced in 2019, providing a range of measures to increase opportunities for SMEs and regional businesses to supply goods and services to the NSW Government.
“While its impact has been positive, we want to continually improve small business participation in our supply chain,” Tudehope said.
Following industry consultation, changes introduced under the refreshed policy will include: increasing the current general exemption of $50,000 for small businesses to $150,000 for SMEs and regional businesses; requiring agencies to first consider SMEs for procurements up to $3M, where direct engagement is permitted; increasing the value that Government places on suppliers which deliver economic, ethical, environmental and social outcomes through a contract; and requiring suppliers tendering for contracts valued at more than $3M to submit an SME and Local Participation Plan, which will become contractually binding.
More informstion on the Small Business Shorter Payment Terms Policy and refreshed SME and Regional Procurement Policy can be found at: buy.nsw.gov.au