Disclosing large company payment performance

Small Business Minister, Stuart Nash, announced this afternoon that the Government intends to introduce legislation to require larger businesses to report on their payment practices.

The proposed reporting requirements are focused on:

• Larger businesses with annual turnover of greater than $33 million
• Incentivising timely payment to small business
• Disclosing late payments to suppliers and the length of time between invoices being received and full payment.

Reports will be required six monthly and the system will be operated by the Ministry of Business Innovation and Employment.

The proposals reflects recommendation 18 of the New Zealand Small Business Strategy developed by the Ministerially‑appointed Small Business Council.  While primarily focused on government payment performance, there is also reference to larger businesses, if necessary:

“RECOMMENDATION 18:

Government lead the way in improving payment practices to small businesses by:

• requiring all government agencies to pay invoices promptly proceeding quickly with imposing maximum contract payment terms
• requiring all government agencies be able to receive e-Invoices by the end of 2020
• holding large businesses to account if necessary.”

Recent reporting, "Govt agencies make it tough to get paid': Small businesses wait for cash," suggests that the Government will also have to hold itself, as well as large businesses, to account as this new arrangement is developed.

The Minister says that consultation with business on the specific reporting measures will take place over the next few months.  The intention appears to be to pass legislation in the third quarter of 2023.