NSW Liberal/Nationals Government To Require Bills To Be Paid Within 30 Days

23 February 2009

A NSW Liberal/Nationals Government will restore accountability and ease the pressures faced by small business by requiring State Government accounts to be paid within 30 days and allowing penalty interest to be charged if the deadline is not met, NSW Opposition Leader Barry O’Farrell said today.

The policy comes following FOI data obtained by the NSW Liberal/Nationals showing there are 75,477 late invoices within the Health Department with a total outstanding value of $132 million as at 31 December 2008 – nearly double the $75 million reported at 30 June 2008.

The data also reveals there are 16,565 late invoices worth $25.4 million in Greater Western Area Health Service.

“When it comes to dealing with the State’s small businesses, I am determined that a NSW Liberal/Nationals Government will pay its bills on time, every time, or pay a penalty,” Mr O’Farrell said.

“It’s unacceptable for the State Government to expect small business to wait months for bills to be paid - especially during these difficult times,” he said.

“Our mandatory code of practice will require public sector accounts with small business suppliers involving contracts of up to $1 million to be paid within 30 days.

“If a State agency fails to pay a bill within 30 days, then small businesses will automatically have penalty interest added to their outstanding bill.

“There is no excuse for a State Government to not pay its bills on time. The 30 day benchmark brings NSW into line with current Federal Government policy.

The NSW Liberal/Nationals policy will:

• require bills with small business suppliers with contracts of up to $1 million will be paid within 30 days;
• ensure failure to meet that benchmark will result in penalty interest being paid to the creditor;
• direct all agencies to provide quarterly reports about their payment performance with results to be posted on the Department of Commerce website;
• direct the Auditor General to undertake compliance audits of payment systems across government to ensure agencies meet the new on-time bill payment policy.

“Under Labor the public has witnessed the humiliation of hospital staff forced to go to the local vet to purchase bandages because regular suppliers had not been paid.

“Labor’s financial incompetence is getting worse.

“At the end of last financial year, NSW Health alone had $75.1 million in accounts exceeding the current Labor benchmark of 45 days for bills to be paid. 

“Freedom of Information documents released by the NSW Liberal/Nationals reveals that has nearly doubled to $132 million by end of the 2008 calendar year.

“In Greater Western Area Health Service there were 16,565 late invoices worth $25.4 million at the end of the 2008 calendar year.

“The average outstanding invoice in Greater Western Area Health Service was $1,533.35.

“Time and time again, under Labor, successive Premiers and Health Minister have promised to fix the problem and ensure bills are paid on time. 

“But the promises have never been delivered because Labor has never held anyone accountable and penalties are never applied.

“The imposition of our code, and the introduction of automatic penalty interest payments for unpaid bills, will change that. 

“It will meet the needs of the State’s small business suppliers and improve the operation of the NSW public sector.

“In government, the NSW Liberal/Nationals will treat small business operators with the respect they deserve. Ensuring their accounts are paid on time is a great place to start,” Mr O’Farrell said.