Western Australia was the only state in the country to record an increase in late business payment times for the September quarter, new data has revealed.
The latest quarterly stats from illion’s (formerly Dun & Bradstreet) Late Payment report show improving payment times for every state, except WA, which registered a four per cent increase to 14.1 days in late payment times.
The average late payment time for an Australian business was 12.6 days in the third quarter, a decline of 9.1 per cent from last September.
Illion economic adviser Stephen Koukoulas said WA’s result was not unexpected given the state of the local economy.
“It was no surprise to see late payments rise in the economically challenged Western Australian economy, which was the only state to see deterioration in late payment times over the past year,” he said
The report also breaks down payment times by sector and revealed that all industries except retail had noticed a decline in late payments.
The mining industry has the equal longest repayment time at 15.7 days, down from 17.9 in September last year.
The Australian Capital Territory has the longest repayment time at 15.3 days while Tasmania recorded the shortest with 9.5.
Mr Koukoulas explained the findings.
“Tasmania, which has registered a stunning lift in economic performance over the past year, saw a sharp 19.4 percent drop in late payments,” he said
“The ongoing high level of late payments in the ACT is linked to the structure of its economy, where the government sector, which is a large part of the ACT economy, is historically slower than other sectors to pay suppliers.”
Meanwhile the federal government announced yesterday a move to introduce 15-day business day payment terms for small business operators.
The government announced the move in response to a report conducted by the Australian Small Business and Family Enterprise Ombudsman in April.
The report found late payments had been an ongoing issue for Australian businesses.
Ombudsman Kate Carnell said the Government’s response showed strong leadership.
“This is a game changer for small businesses and family enterprises that provide goods and services to the Government,” Ms Carnell said.
“Cash flow is king for small business and this will make a huge difference.
“It will save money on interest payments, boost confidence and free up capital for reinvestment.”