Business payments regime passes into law
Published: 21 July 2023
A new Bill designed to reduce the stress and costs to small businesses of long payment wait times has passed its third reading on the 19 July.
The Business Payment Practices Bill will require large businesses to publicly disclose their payment terms, and how long they take to pay their bills, addressing the challenge that long payment terms create in business-to-business transactions.
Businesses with revenue of at least $33 million, and third-party expenditure of at least $10 million a year will have to make their payment times and terms public.
Small businesses make up over 97% of all businesses in New Zealand but they often do not have the financial resources to deal with long payment times. Long payment times can create cashflow problems for small businesses.
By making large businesses disclose information about their payment times and terms on a new public register to be administered by MBIE, small businesses will be able to make informed choices about who they want to do business with.
The new transparency regime will encourage larger businesses to improve their payment times.
The new system will be rolled out to the largest organisations first – those with $100 million revenue turnover. The first reporting period for this new system will begin 10 months after the Bill has passed, and the first disclosures on the register will be made 7 or 8 months after that.
Read the Minister's press release(external link)— Beehive.govt.nz
MBIE media contact
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