Supplementary Explanatory Memorandum(Circulated by authority of the Minister for Employment, Skills, Small and Family Business, Senator the Hon Michaelia Cash)
AMENDMENT TO THE PAYMENT TIMES REPORTING BILL 2020
The Payment Times Reporting Bill 2020 and the Payment Times Reporting (Consequential Amendments) Bill 2020 were introduced in the House of Representatives on 13 May 2020 and passed on 11 June 2020. The Bills were introduced into the Senate on 12 June 2020 and subsequently referred to the Senate Education and Employment Legislation Committee (the Committee) for inquiry and report. The Committee released its final report on the Bills on 30 July 2020.
The Committee recommended that the Bills be passed and that the Australian Government undertake a review of the Payment Times Reporting Scheme (the Scheme) two years after its commencement.
The amendments to the Payment Times Reporting Bill 2020 (the Bill) address the Committee's recommendation for a statutory review of the Scheme, as well as concerns raised by the Senate Standing Committee for the Scrutiny of Bills and other stakeholders as to whether the definition of 'small business' set out in section 5 of the draft Payment Times Reporting Rules 2020 (the draft Rules) can be included in the Bill.
Other amendments to the Bill respond to stakeholder feedback received during the Committee's Inquiry process as well as the outcomes of further consultations on the Bill. A number of amendments are minor or technical in nature to ensure the administrative efficiency of the Scheme and that the provisions operate as intended.
The key amendments to the Bill include:
- new provisions requiring an independent statutory review of the Act and Rules in line with the Committee's recommendation;
- reducing the transition period for the introduction of compliance and enforcement measures after the commencement of the Scheme from 18 months to 12 months;
- requiring additional information to be included in a Payment Times Report on payments made beyond 60 days including payments made between 61 and 90 days, 91 and 120 days and more than 120 days after a small business invoice is issued;
- moving some content requirements of a Payment Times Report from the draft Rules into the Bill including administrative details such as the reporting entity's name, ABN and its main business activity;
- including the definition of 'small business' in the Bill and inserting a new legislative note to the definition;
- ensuring that most reporting entities start their first reporting cycle on the Scheme's commencement; and
- requiring reporting entities to report in a form and manner approved by the Payment Times Regulator or its delegate.
FINANCIAL IMPACT STATEMENT
New provisions in the Bill requiring an independent statutory review of the Act will likely have a minor financial impact, although these costs are unknown at this time. These costs will be considered separately in future as part of the Government's budget process.
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