Source: New Zealand Government
The Government is adding to the support it has offered New Zealand’s small businesses by introducing new measures to help ensure they get paid on time.
A Business Payment Practices disclosure regime is being established to improve information and transparency around business-to-business payment practices across the economy, Small Business Minister Stuart Nash announced today.
“Small businesses account for more than 97 per cent of all businesses in New Zealand. Late and overdue payments have a negative impact, causing unnecessary stress and uncertainty, while extended payment terms can cause real harm – particularly when a supplier has no choice but to accept them on a ‘take it or leave it’ basis,” Stuart Nash said.
Large firms (those with revenue over $33 million a year) will be required to publicly report on their own payment practices, particularly late payments, and the length of time between the receipt of invoices and full payment. This information will need to be submitted every six months, which is consistent with similar regimes in Australia and the United Kingdom.
“The Small Business Council’s Small Business Strategy identified a number of challenges facing New Zealand’s business communities and the Government is committed to helping.
“Small businesses are less resilient to poor payment practices because they are not as well-equipped or resourced to endure such practices. Many businesses are also reluctant to push for prompt payment because of fear of damaging relationships. Poor payment practices can have flow-on effects for the wider economy, particularly in times of economic uncertainty.
“Large firms will also be required to publish payment practice information on their own websites, bringing in another layer of transparency. Those who fail to disclose payment practice information may face compliance notices and penalties.
“The Business Payment Practices disclosure regime will help small businesses make decisions on who to do business with and encourage larger firms to improve their payment practices to manage any reputational risk,” Stuart Nash said.
Further consultation with business communities will take place in the coming months on the specific reporting measures.
