The short answer

Public Governance, Performance and Accountability Amendment (Supporting Small Businesses To Be Paid On Time) Bill 2026 explained

The Public Governance, Performance and Accountability Amendment (Supporting Small Businesses To Be Paid On Time) Bill 2026 is a private member's bill introduced by Allegra Spender MP (Independent, Wentworth) on 22 June 2026. According to the official summary on the Parliament bill page, the bill amends the Public Governance, Performance and Accountability Act 2013 to provide that the Commonwealth must not enter into a procurement contract above a prescribed threshold with a business that, in each of its three most recent reporting cycles, either had an average payment time to small business suppliers exceeding 30 calendar days or failed to lodge a required payment times report. The bill is before the House of Representatives as of 10 August 2026. As a private member's bill without government backing, its path to passage is uncertain, and if passed it would take effect as drafted.

This is a federal system guide. State constitutions, parliaments and local-government laws can allocate comparable functions differently.

The useful question is not only “what is the rule?” but also “who administers it, which document controls it, and when might it change?” That distinction prevents an accurate general explanation from becoming wrong advice in a particular election, chamber or policy setting.

Evidence review

The late payments problem

Late payment by large organisations is a persistent problem for Australian small businesses. When a government department or large corporation takes 60, 90 or 120 days to pay an invoice, the small business supplier effectively acts as an unpaid lender — carrying wages, materials and overheads while waiting for cash that is contractually owed.

The Commonwealth is one of Australia's largest purchasers of goods and services, spending tens of billions of dollars each year through procurement. A significant proportion of those contracts involve small and medium enterprises as suppliers or subcontractors.

The government has acknowledged the problem through the Payment Times Reporting Scheme, which requires large businesses to report their payment times. However, that scheme does not mandate payment deadlines — it creates transparency without enforcement. This bill seeks to add an enforcement mechanism specifically for the Commonwealth's own procurement practices.

Evidence review

What the bill would require

The bill amends the PGPA Act 2013, which governs how Commonwealth entities manage public resources. The official summary on the Parliament bill page states that the bill provides that the Commonwealth must not enter into a procurement contract above a prescribed threshold with a business that, in each of its three most recent reporting cycles, either had an average payment time to small business suppliers exceeding 30 calendar days or failed to lodge a required payment times report.

The mechanism is a procurement exclusion rather than a new payment deadline imposed directly on every contract. Under the bill, a business that has persistently paid small business suppliers late — averaging more than 30 calendar days across each of its three most recent reporting cycles — or that has failed to lodge a required payment times report, would be ineligible for Commonwealth procurement contracts above the prescribed threshold.

Allegra Spender, the member for Wentworth, has been a consistent advocate for small business payment reform. Her electorate includes a significant small business community, and she has raised payment times in parliamentary debate and with the government.

Evidence review

Interaction with existing schemes

The bill would sit alongside the existing Payment Times Reporting Scheme, which requires around 7,000 large businesses and government entities to report their small business payment times every six months. That scheme publishes the data but does not impose payment deadlines or penalties for late payment.

The government has also issued a Supplier Pay On-Time or Pay Interest policy for non-corporate Commonwealth entities, which applies to contracts valued up to $1 million and requires payment within 30 days or interest at the Reserve Bank cash rate plus an administrative fee. However, this is a policy, not a law — it can be changed administratively and has limited enforcement mechanisms.

The bill would use the reporting data the scheme already collects: a business's average payment time to small business suppliers and its compliance with payment times reporting obligations would determine whether the Commonwealth may contract with it above the prescribed threshold. This connects the transparency scheme to Commonwealth procurement eligibility.

Evidence review

Parliamentary pathway

The bill was introduced on 22 June 2026 and the second reading was moved the same day. No debate has occurred and no committee referral has been made. As of 10 August 2026 the bill is before the House of Representatives. As a private member's bill, it must compete for limited private members' business time in the House.

Private members' bills that attract government support can be adopted and progressed as government business. Those without government support generally do not proceed to a vote. No government support has been indicated for this bill at the time of writing.

Even if the bill passes the House, it would need to pass the Senate — where private members' bills face similar structural obstacles. The government could alternatively adopt the policy intent and introduce its own legislation, which would render the private member's bill redundant.

Evidence review

What remains unknown

Key details that are not publicly available at this stage include: the prescribed contract threshold above which the exclusion applies; how the three most recent reporting cycles are counted for businesses that have not been reporting for that long; whether the exclusion applies to all Commonwealth entities or only some; and the definition of 'small business' (employee count, turnover, or both) used for the payment times reporting obligations.

The bill's fiscal impact has not been independently costed. There may be administrative costs for entities that need to check payment times reporting compliance as part of procurement, and there may be impacts on the pool of suppliers available for Commonwealth contracts above the threshold.

No Bills Digest or committee report is available. The Explanatory Memorandum is the most detailed public document on the bill's operation.

Common questions

Before you rely on the answer

Doesn't the government already have to pay its bills on time?

The government has a policy — the Supplier Pay On-Time or Pay Interest policy — that applies to contracts under $1 million and requires payment within 30 days. But this is a policy, not a law, and it has limited enforcement. This bill would create a legislative consequence: businesses that persistently pay small suppliers late would be excluded from Commonwealth procurement contracts above a prescribed threshold.

What happens if a business pays small suppliers late under this bill?

Under the bill, a business that, in each of its three most recent reporting cycles, had an average payment time to small business suppliers exceeding 30 calendar days — or failed to lodge a required payment times report — could not be awarded a Commonwealth procurement contract above the prescribed threshold. The exact threshold and administration would need to be confirmed from the bill text.

Will this bill become law?

It is uncertain. Private members' bills rarely pass without government support. The bill may influence government policy even if it does not proceed to a vote — the government could adopt its approach in its own legislation.

Source spine

Primary material used for this guide

Review trigger: Official summary published on the Parliament bill page (changed_field: official_summary); re-verified against the live APH page on 2026-08-11. Parliamentary status re-checked on 2026-08-11 (unchanged: Before House of Representatives). Review when the bill status, committee report or official summary changes.

Archive note: Official summary incorporated on 2026-08-07. Written from the bill's APH page, first reading text and Explanatory Memorandum. The bill had not been debated at the time of writing.

Primary links are provided without affiliate or tracking parameters. Confirm that the source still applies to the bill, sitting date, jurisdiction or reporting period before relying on it.