Slow payers could be locked out of federal contracts
Allegra Spender MP is an independent member of Parliament, not part of any party. She wants to keep some big businesses out of large government contracts. These are firms that take more than 30 days on average to pay small suppliers. It touches big companies that sell to the government and the small firms that supply them.
Official name: Public Governance, Performance and Accountability Amendment (Supporting Small Businesses To Be Paid On Time) Bill 2026
- A big firm would be a "restricted payer" if it took over 30 days on average to pay small suppliers, in three reports in a row.
- Not handing in a payment times report would count against a firm too.
- Restricted payers could not win federal contracts above a size set in later rules.
- The Finance Minister could let some through, such as when no other supplier exists.
- It is a bill from an MP outside the government. It is still waiting in the House of Representatives, the lower house of Parliament.
Who it affects
- Big businesses that earn over $100 million a year: If they pay small suppliers slowly in three reports in a row, they could lose the chance at large federal contracts.
- Small businesses that supply big firms: The bill aims to get them paid faster by giving big customers a reason to pay on time.
- The Finance Minister: The minister could let a slow payer bid anyway in a few set cases.
Slow payers squeeze small firms
Small businesses often wait a long time to be paid by big customers. Allegra Spender's notes on the bill say this is one of the biggest causes of money stress for small firms.
The notes say the company and finance watchdog has looked into this. It found that running short of cash is the most common reason small businesses go broke.
Since 2020, big businesses that earn over $100 million a year must report how fast they pay small suppliers. They report every six months to the Payment Times Reporting Regulator. That is the agency that runs the scheme. The results go on a public list.
A 2023 review of that scheme was called the Emerson Review, after the person who led it. The law said the scheme must be reviewed. It said the scheme was not working well.
It found small businesses cannot really say no to a big customer who pays slowly. That is because the big customer holds the power.
It said the government should think about using payment times when it picks who wins government contracts.
How slow payments are now
The notes give the latest figures, for the six months to December 2025. On average, 70% of payments to small businesses were made within 30 days. About 24% took 30 to 60 days. Another 6% took more than 60 days.
Only 4% of big payers made all their payments within 30 days. About 4.6% had at least one payment that took more than 100 days.
Who brought the bill
This is a private bill. That means one MP brought it, and the government did not write it. Allegra Spender MP brought it to the House of Representatives on 22 June 2026.
Who counts as slow
The bill changes the Public Governance, Performance and Accountability Act 2013. That is the law that sets the rules for how the government buys things.
It creates a new label called a restricted payer. A big business gets this label if it took over 30 days on average to pay small suppliers. This must be true in each of its last three reports.
Reports come every six months, so that covers about 18 months.
A report that was never handed in counts as a bad one too. Three missing reports in a row would be enough.
The label clears itself. One report with an average of 30 days or less breaks the run. Then the firm is no longer a restricted payer.
The bill does not set a top time for any single payment. It looks only at the average.
What happens to slow payers
The government must not sign a contract with a restricted payer if the contract is above a dollar limit. The limit would be set in detailed rules made later, without a new vote.
Say a big building company bids for a large defence building job. Its average payment to small builders it hires was 40 days in each of its last three reports. It could not win the job.
If it got its average down to 28 days in the next report, it could bid again.
Exceptions the minister can make
The Finance Minister could let the government sign with a restricted payer in four cases. The minister would have to put the choice in writing.
The first is when the contract is needed for something vital to the nation. The second is when there is no fair other supplier.
The third is when the business has made a believable plan to fix its payment times within 18 months or less. Letting it bid must also be good for the public. The minister could cancel this if the business does not stick to its plan.
The fourth is when leaving the business out would make taxpayers get much worse value for their money.
A business unhappy with the minister's choice could ask the Administrative Review Tribunal to look at it again. A tribunal is like a court but less formal. This one checks government choices.
Rules now and overseas
Two rules already deal with slow payment in government work. Government departments must pay their own suppliers on time. If they pay late, they must pay extra money for the delay, called interest.
Big firms with federal contracts over $4 million must pay the smaller firms they hire within 20 days on that contract.
The notes say neither rule looks at how a firm pays all its suppliers when picking who wins a contract. This bill would.
The notes say the United Kingdom has had a policy like this since 2019. Firms bidding for contracts above £5 million (5 million British pounds) must show 95% of their payments are made within 45 days.
Waiting in the House
Allegra Spender brought the bill to the House of Representatives on 22 June 2026. That day she also started the debate on its main idea.
It is still waiting in the House. It would need to pass the House and then the Senate, the other house of Parliament, to become law.
Bills from MPs outside the government often wait a long time. Many never come to a vote.
Its journey through Parliament
| 22 Jun 2026 | House of Representatives: Introduced and read a first time |
| 22 Jun 2026 | House of Representatives: Second reading moved |