Minister for Small Business, Tasmanian MP Julie Collins, said the recommendations from a review of the Commonwealth Payment Times Reporting Act undertaken by former Labor minister Dr Craig Emerson would help level the playing field for operators such as Hobart’s Tunnel Hill Mushrooms.

“It’s really important that small businesses are paid on time by big businesses,” Minister Collins said.

“We know that many big businesses do the right thing, but there are some who don’t.

“What we are trying to do here is to make sure that big businesses pay small businesses within 30 days or less. This is so important to cash flow.

“Small businesses are contributing $500 billion a year to our economy, and employ over 5 million Australians. It’s really important that they can manage their cash flow, so that they can grow and employ more Australians.”

Minister Collins said the Government had committed to implementing all 14 of the review’s recommendations.

Dr Emerson said his six-month review had found that awareness of the existing late payments reporting scheme among small business owners was very low, meaning its effectiveness was negligible.

The former Rudd and Gillard cabinet minister said the review had found the data-entry requirements of the old system led it to be “cluttered, clunky, and confusing.”

“We even came to the conclusion that it was almost useless,” Dr Emerson said.

“We also found that there had been no discernable improvement in payment times or terms in the period from 2020 to late 2022.

“We even found that particularly through Covid-19, some large business were using late payments as a cash-flow advantage over small businesses.

“Businesses don’t like to be named as a late payer, so we thought that is something that could be done … but if big businesses pay early, they will actually be named and praised.

“These changes will make it easier for large business to comply, but harder for them to get away with bad behaviour.”

Tunnel Hill Mushrooms proprietor Dean Smith, who has been growing a wide variety of mushrooms inside an old railway tunnel at Mt Rumney for more than 20 years, welcomed news of the payment system reforms.

Mr Smith said he supplied fresh produce to large hospitality firms and restaurants, and as his business’s only worker, he did not have time to chase late payments.

“I love dealing with the chefs directly, but when it comes time to pay I can be chasing the invoices up which isn’t great for a small business like mine,” Mr Smith said.

“It also stops my business from growing because I’m relying on that money to come in from week to week, and if invoices aren’t paid on time it puts me under even more pressure.”