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This Finance Circular takes effect from 1 September 2012 and replaces Finance Circular 2008/10: Procurement 30 Day Payment Policy for Small Business.
Applying to Financial Management and Accountability Act 1997 (FMA Act) agencies, the policy outlines that where applicable, agencies are to agree maximum payment terms not exceeding 30 days for procurement contracts with small business that include payments valued less than $5 million (GST inclusive).
Additionally, for procurement contracts with small business valued up to $1 million (GST inclusive), the policy requires agencies to pay penalty interest on request from small business for payments exceeding the maximum payment terms up to 60 days, and automatically to the small business for payments exceeding 60 days.
Finance has developed further supporting material to assist officials and small businesses further understand and apply the Finance Circular. This includes:
With the exception of the Commonwealth Coat of Arms, this work is licensed under a Creative Commons Attribution 3.0 Australia licence (CC BY 3.0) (http://creativecommons.org/licenses/by/3.0/au/deed.en ).
This work must be attributed as: ‘Commonwealth of Australia, Finance Circular No. 2012/02 – Procurement On-Time Payment Policy for Small Business.’
Inquiries regarding the licence and any use of this work are welcome at:
Financial Management Group
Department of Finance and Deregulation
John Gorton Building, King Edward Terrace, Parkes ACT 2600