Fair payments for small business

Why this is important

Managing cashflow is important for small businesses. As the Victorian Government purchases many goods and services from small businesses, it should lead by example and make sure it pays invoices in a timely manner.

In 2021, the Victorian Government amended its Fair Payments Policy to provide better cashflow certainty for businesses as they recovered from the effects of the COVID-19 pandemic. Departments and select agencies must pay invoices of up to $3 million within 10 business days. If agencies do not make payments within 10 business days, they are liable to pay penalty interest. 

In 2023–24 Victorian Government departments paid 549,098 invoices and agencies paid 946,556 invoices. The Victorian Small Business Commissioner reported 84 per cent of invoices for contracts less than $3 million were paid within 10 days. 

However, it does not report on which departments and agencies are non-compliant.

What we plan to examine

We plan to examine if Victorian Government departments are making fair and timely payments to small businesses.

Who we plan to examine

All departments

Victorian Small Business Commission