The news New Zealand measures to help small businesses to collect on time are one step closer since on November 8 the first reading of the bill on payment practices of companies was approved.
“Timely payment for goods and services is crucial to the financial health of any business. Small businesses, in particular, are less resistant to poor payment practices, which can cause stress and uncertainty. They are often reluctant to push for a quick payment for fear of damaging relationships,” said Stuart Nash, a New Zealand member of parliament.
“That’s why we’re putting in place the company payment practices disclosure regime, which I announced in September. This regime will require large companies, those that invoice more than 33 million dollars a year, to make public information about their payment practices, in particular delinquencies, “he added.
Having access to this information will help small businesses identify and avoid those businesses that are slower to pay than others.
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“I am pleased to be advancing a scheme that will help reduce stress for our small businesses, which make up over 97% of New Zealand businesses.”
Delinquencies and delayed payments not only cause uncertainty in small businesses, but also slow down investment and job creation. This law will also encourage larger entities to improve their payment practices to manage any risk to their reputation.
“This adds to the support we offer to New Zealand small businesses and will improve information and transparency around business-to-business payment practices across the economy,” said Stuart Nash.
Aid offered to small businesses by the New Zealand Government
The government provided a series of aids to small businesses during the pandemic, such as wage subsidy, revival support payment, and small business treasury loan scheme.
The Digital Boost program was also introduced to support and accelerate the digitalization of small businesses, as it has been shown that companies with greater digital capacity survived the pandemic in better financial shape.
Small businesses are less resistant to poor payment practices, which can cause stress, uncertainty, slow investment and job creation
“We are focused on supporting companies to regain their footing and continue to grow. This report is an important way of making it easier for small businesses to thrive and brings us in line with the UK and Australia.
“I encourage business communities to provide input to help shape the final regulations and disclosure measures of this important regime,” concluded Stuart Nash.
