Pay small business bills now, Govt says

Pay small businesses now to help the economy recover.

That’s the message from government ministers to big businesses as the country recovers from the economic shock caused by Covid-19.

The finance, small business, commerce and consumer affairs ministers are urging big business to embrace prompt payment in line with the state sector, to improve cashflow for small businesses. The ministers wrote to major entities asking for 95 per cent of invoices within 10 days.

Finance Minister Grant Robertson said once Covid-19 hit, government agencies were urged to bring forward the prompt payment target with ‘‘immediate effect’’.

‘‘Paying suppliers faster is an important way to unlock cashflow and productivity benefits, which supports ongoing business sustainability,’’ he said.

‘‘Large employers are already doing a lot to support their people and smaller businesses . . . Together with government, these businesses can help protect jobs.’’

Small Business Minister Stuart Nash said supporting SMES was central to recovery ‘‘Late payments impede recovery and force business owners to resort to personal savings,’’ he said. ‘‘Our government support package is also getting cash out the door to SMES through interest-free loans, a $3 billion tax-refund package, and the wage subsidy.’’

Banks have already committed to reaching the target.

‘‘The banking industry understands how important prompt payments are to the viability of many businesses, especially at the moment,’’ New Zealand Bankers’ Association (NZBA) chief executive Roger Beaumont said.

All NZBA members were committed to paying within two weeks, he said.

Yesterday, Xero launched improved financial management tool pilots to help SMES manage revenue, profit and cashflow. The tools available to SMES include e-invoicing, business snapshot and short-term cashflow. The pilot is due to be rolled out in two weeks.

Xero New Zealand managing director Craig Hudson said ‘‘big business has historically been guilty of treating small businesses as free sources of credit by imposing lengthy payment terms. This ties up money in limbo rather than circulating it through local communities, impacting on the livelihood of Kiwi small businesses – not to mention the wider economy at large,’’ he said.

‘‘Now, more than ever, we can not afford to have what is effectively an economic handbrake applied.’’

STUFF Supporting SMES such as Millie Rowe’s Millie Rose in Timaru is ‘‘central to recovery’’ during Covid19, Small Business Minister Stuart Nash says.