Prime Minister Scott Morrison has put a hand up to help small businesses with the pain of not being paid on time.Credit:AAP
Those same businesses will also have to commit to 20 day payment terms if they are to tender for federal government contracts.
Mr Morrison announced the measures in a speech to a Business Council of Australia event on Wednesday saying he had"listened,and heard,loud and clear from small businesses around Australia".
"We are taking action to ensure small business is not be used as a bank,"he said.
Mr Morrison said that the federal government would also overhaul its own policies on paying smaller companies.
The federal government already has a commitment in place to pay invoices within 30 days but Mr Morrison said the government would now cut this to 20 days for invoices under $1 million by July next year.
"There should be no excuses for not paying small businesses on time."
Minister for Employment Michaelia Cash.Credit:Alex Ellinghausen