Page 1022 - Week 04 - Wednesday, 20 April 1994
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This Bill sets about establishing a new regime for dealing with accounts payable - dealing with accounts on the basis that they are due within a month and, if payments are made late without some reasonable dispute, interest begins accruing. The Estimates Committee actually made some comments on this proposal and went so far as to recommend that steps be taken to ensure payment of all accounts by government, where no dispute exists, within 30 days of an invoice being rendered. ACT Health told the committee that payments were made 30 days after the invoice was certified for payment. We asked: What happens if an invoice is not certified for a month? It, therefore, effectively takes two months to pay an account. Small business suppliers should not have to regard this as a normal business practice, in my view, even though it was suggested by Mr Ayling of ACT Health that that was normal business practice.
Madam Speaker, I turn to some of the mechanics of this Bill which I have presented today. Clauses 1 and 2, I think, are self-explanatory. Clause 3 contains a number of definitions. For example, a "commercial account" is described as being an account rendered to the Territory or a Territory authority for payment for goods, services or the execution of works. The definition includes deposits, part payments, instalments or bonds where applicable to a particular account.
The term "due date" is defined as meaning the 25th day of the month after the day of rendering the account. That would mean that up to 55 days might elapse before an account was due to be paid and before interest began to run. As you can see, that is slightly less onerous than the condition that was recommended by the Estimates Committee last year. This due date mechanism uses a single day for accounts where a due date is not otherwise given but enables some flexibility where a contract makes different due date arrangements.
The term "Territory authority" applies to all government departments, statutory authorities and government business enterprises except those specified in Schedule 1 of the Territory Owned Corporations Act 1990. At the present time, of course, the only one is Totalcare Industries Ltd. The Liberal Party felt that if corporatised bodies were in the marketplace competing as non-government businesses they in effect should be in the same position as any business in the marketplace; that they should be subject to their own rules.
The operations of this Bill are predicated on the wish that the Bill would never be needed because government would be paying its bills on time. The Bill requires that all accounts payable by governments be paid by the 25th day of the month after the account becomes payable unless the terms of the contractual arrangement require different payment options. For example, if a government agrees to a seven-day account for any reason, the account becomes payable by the date established under that arrangement. Similarly, the Government could agree to longer terms of payment if it so wished. So we are not imposing any restrictive rules that the Government might find inappropriate in certain circumstances, although of course we expect some accountability by the Government in the circumstances where it decides to step outside the terms of this Bill and have a different, longer period for payment of accounts.
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