Page 5054 - Week 12 - Wednesday, 26 October 2011
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Mr Smyth interjecting—
MR SPEAKER: Order, minister! Please stop baiting the opposition. I find it hard to keep them quiet when you bait them. Thank you.
MR BARR: Thank you, Mr Assistant Speaker. I digress. The government payments process, for the information of members, is that once invoices are in the system, the payment is made based upon the date of the supplier invoice and the relevant payment terms. I will give a very clear example: an invoice dated 1 October with payment terms of 30 days would be paid on 31 October, assuming it has been properly authorised and entered into the government’s financial system prior to that time.
I think it is worth noting, though, that in addition the Building and Construction (Security of Payments) Act provides firms working in the building and construction industry with security that they will be paid in a timely manner for completed work. The security of payments act allows construction entities to seek a determination of payment within 10 days of the issuing of an invoice. The onus is on the territory to ensure that within those 10 days the claim is valid and payable in accordance with the contract.
The Government Procurement Act 2001 makes provision for interest to be paid by the government on a commercial account. Without quoting the various clauses of the act, assuming conditions are met, interest can be paid where the territory is significantly late in making a payment. So it is there within the Government Procurement Act. The government recognises that paying around 85 per cent of invoices on time still means that there is room for improvement in around 15 per cent of cases.
However, as the shadow treasurer acknowledged in his contribution, the reasons for a late payment are many and varied. They must be understood at a detailed level to determine how to improve while still maintaining the territory’s interest in only paying properly authorised invoices. A non-comprehensive list of reasons for delay can include disputes on how goods and services are delivered, invoicing errors from suppliers—for example, non-compliant tax invoices or incorrectly addressed invoices—invoices not received from suppliers in a timely manner—ie, the date received is much later than the invoice date—and processing errors, including incorrect coding and inappropriate authorisation.
Having said that, there is no doubt that there is room to improve work processes. The Shared Services area of government, as part of their continuous improvement regime, are engaged in a business review process right now. Directorates will also be engaged in work process improvements, especially in relation to service level standards and specifications.
The government, through the Government Procurement Act 2001, has a series of comprehensive policies embedded in legislation. The act forms the basis of all government purchases of goods and services, including capital works and also governs our approach to payments to suppliers. The act requires that the territory pursues value for money in undertaking any procurement activity, having regard to
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