Chartered Accountants Australia and New Zealand (CA ANZ) and CPA Australia have made a submission regarding the payment times reporting rules exposure draft and associated consultation paper.
Both bodies are strongly supportive of a Payment Times Reporting Framework (the Framework) and believe that small businesses, like all other businesses should be paid on time and in a timely manner. However, these rules are needlessly complicated and place unnecessary regulatory compliance costs on both business and government. The draft rules require the establishment of a Payment Times Small Business Identification Tool to identify small businesses. This involves the transfer of tax information from the ATO to the Department of Industry so that software can be developed to create a register that then needs to be integrated into the accounting systems of large companies and regularly updated.
The regulatory impact statement to the Bill estimates that the compliance costs for reporting entities will increase by an average of $22.5 million per year and that $10 million of government funding over four years from 2019-20 (including $3.4 million in capital funding). A simpler way to achieve the same policy outcome would be to require reporting entities to use an expenditure threshold as a proxy for identifying small business – which many businesses already do. (An expenditure threshold would require a large business to report all invoices for a supplier less than $X million of goods and services annually).