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This is a Bill, not an Act. For current law, see the Acts databases.
South Australia
Late Payment of Government Debts (Interest)
Bill 2013
A BILL FOR
An Act to provide for interest to be paid on the late payment of debts due
to small businesses in connection with contracts for the supply of goods or
services to State Government; to make a related amendment to the Public
Finance and Audit Act 1987; and for other purposes.
Contents
1Short title
2Commencement
3Preliminary
4Change
in identity of parties
5Occurrence of default
event
6Interest payable if default event
occurs
7Disputes
8Reporting
9Regulations
10Review
Part 1—Preliminary
1Amendment
provisions
Part 2—Amendment of
Public Finance and Audit Act 1987
2Amendment of section
41—Treasurer's instructions
The Parliament of South Australia enacts as
follows:
This Act may be cited as the Late Payment of Government Debts (Interest)
Act 2013.
This Act will come into operation on a day to be fixed by
proclamation.
(1) In this Act, unless the contrary intention appears—
annual turnover means an amount determined after applying the
principles published by the Treasurer under
subsection (2);
business includes any form of undertaking (including an
undertaking not necessarily carried on for profit);
contract for the supply of goods or services means a
contract—
(a) for the sale or transfer of goods; or
(b) for the hire of goods; or
(c) for the provision of services;
designated contract means a contract for the supply of goods
or services but does not include—
(a) a written contract where the contract—
(i) makes specific provision for payment terms that are greater than
30 days; or
(ii) makes specific provision for the payment of interest if a payment is
not made in accordance with the terms of the contract; or
(b) a construction contract under the Building
and Construction Industry Security of Payment Act 2009;
or
(c) a contract where the consideration for the sale, transfer or hire of
goods, or the provision of services, is not, or does not include, a monetary
consideration; or
(d) a contract of a class excluded from the ambit of this definition by
the regulations;
designated payment period means the period of 30 days
that applies under
section 5(1)(e);
GST means the tax payable under the GST law;
GST law means—
(a) A New Tax System (Goods and Services Tax) Act 1999 of the
Commonwealth; and
(b) the related legislation of the Commonwealth dealing with the
imposition of a tax on the supply of goods and services;
prescribed interest rate means a rate of interest (expressed
as an annual rate) prescribed by the regulations;
public authority means a public authority under the Public
Finance and Audit Act 1987 brought within the ambit of this
definition by notice published by the Treasurer in the Gazette;
purchaser means the buyer in a contract for the sale of goods
or the person who contracts with the supplier in any other contract for the
supply of goods or services (subject to the operation of
section 4);
qualifying body means—
(a) a corporation incorporated under the Corporations Act 2001
of the Commonwealth; or
(b) any other body corporate constituted under the law of the
Commonwealth, the State or another State or Territory;
qualifying contract means a designated contract
where—
(a) the purchaser is a public authority; and
(b) the supplier is a qualifying person or a qualifying body;
qualifying day means the day immediately following the end of
a designated payment period that applies in relation to a particular qualifying
contract under
section 5;
qualifying debt means a debt created by virtue of a
qualifying contract;
qualifying person means a natural person whose principal
place of residence is situated in Australia;
small business means a business carried on by a qualifying
person or a qualifying body where the annual turnover of the business does not
exceed $5 million (or if a greater amount is prescribed—the
prescribed amount) in the financial year immediately preceding the financial
year in which the relevant qualifying day occurs;
supplier means the seller in a contract for the sale of goods
or the person agreeing with the purchaser to transfer property in goods or to
provide a service under any other contract for the supply of goods or services
(subject to the operation of
section 4);
Treasurer's instruction means an instruction issued by the
Treasurer under section 41 of the
Public
Finance and Audit Act 1987.
(2) The Treasurer may,
by a Treasurer's instruction, publish principles that are to apply for the
purposes of determining the annual turnover of a business for the purposes of
this Act.
(3) This Act applies in relation to an invoice sent or a claim made to a
public authority or other entity on or after the day on which this Act comes
into operation (subject to the invoice or claim being rendered in accordance
with a relevant Treasurer's instruction).
4—Change
in identity of parties
The operation of this Act in relation to a qualifying debt is not affected
by—
(a) a change in the identity of a party to the contract creating the debt;
or
(b) the passing of the right to be paid the debt or the duty to pay it (in
whole or in part) to a person other than a party to the contract creating the
debt.
(1) For the purposes of
this Act, a default event occurs if—
(a) goods or services are provided to a public authority under a
qualifying contract; and
(b) an invoice is sent or a claim is made by the supplier under the
qualifying contract for the payment of a qualifying debt; and
(c) the invoice or claim is rendered to the public authority, or to
another public authority or other entity, in accordance with any relevant
Treasurer's instruction; and
(d) the invoice or claim complies with any requirements as to the
imposition of GST (as between supplier and purchaser); and
(e) payment by or on
behalf of the public authority is made to the supplier but the payment is made
more than 30 days after the relevant day; and
(f) the public
authority (or another public authority or entity acting on behalf of the public
authority) did not dispute a relevant matter within the designated payment
period.
(2) A public authority or other entity must, in initiating a dispute under
subsection (1)(f),
comply with any procedure set out in any relevant Treasurer's
instruction.
(3) In this section—
relevant day means the day on which an invoice or claim
(being an invoice or claim that complies with any relevant Treasurer's
instruction and is in all other respects in the correct form for payment) is
received by a public authority, or a public authority or other entity acting on
behalf of a public authority, in accordance with any relevant Treasurer's
instruction;
relevant matter means—
(a) whether goods or services have been provided in accordance with the
terms or provisions of a qualifying contract; or
(b) some other matter relating to the supply of goods or services under a
qualifying contract; or
(c) whether an invoice or claim has been properly rendered; or
(d) any other prescribed matter.
6—Interest
payable if default event occurs
(a) a default event occurs; and
(b) the qualifying contract in relation to which the default event occurs
relates to the supply of goods or services as part of a small business carried
on by a supplier on the qualifying day,
the supplier under the qualifying contract is (subject to this section)
entitled to interest calculated in accordance with the following
formula:
where
I is the interest payable to the supplier
ND is equal to the number of days that make up the default
period
IA is the amount paid by or on behalf of the public authority
on account of the invoice or claim that has been rendered by the supplier
(exclusive of GST)
PIR is the prescribed interest rate applying on the first day
of the month in which the designated payment period ends.
(2) For the purposes of
subsection (1), the
default period is the period beginning on the day immediately following the end
of the designated payment period and ending on the day immediately preceding the
day on which payment is made by or on behalf of the public authority.
(3) For the purposes of
subsection (2), the
day on which a payment is made by or on behalf of a public authority will be
taken to be—
(a) the day on which an electronic funds transfer is made to a financial
institution for processing in order to make payment to the relevant supplier;
or
(b) the day on which payment is made by the use of a payment card or a
credit card; or
(c) the day on which a cheque is posted to the relevant
supplier.
(4) A supplier is not entitled to interest if the amount of interest
calculated under this section is less than $20.
(5) Interest payable under this section will be a liability to be
satisfied by the public authority that is in default (and will be payable out of
money made available or held for the purposes of the public
authority).
(6) The following
provisions apply in relation to the payment of interest under this
Act:
(a) until the designated date—the supplier entitled to the interest
must claim the interest by furnishing an invoice in the prescribed form
(accompanied by any prescribed information) to the public authority, or to
another public authority or other entity, in accordance with any relevant
Treasurer's instruction;
(b) on or after the
designated date—the public authority must pay the interest when it makes
the payment for the goods or services supplied under the qualifying
contract.
(7) To avoid doubt, interest is not payable on any unpaid interest under
this section.
(8) This section applies subject to the outcome of any dispute under
section 7.
(9) In this section—
designated date means a date designated by the Treasurer by
notice published in the Gazette.
(1) If a dispute arises
between a public authority and a supplier about whether—
(a) a supplier is carrying on a small business on a particular qualifying
day; or
(b) interest or an amount of interest is payable under this Act on account
of any other prescribed matter,
the matter may be referred to the Small Business Commissioner (who is
conferred with the function of resolving the dispute).
(2) The Small Business Commissioner may specify procedures and
requirements that are to apply in connection with the operation of
subsection (1).
(3) The Small Business Commissioner may resolve a dispute in such manner
as the Commissioner determines to be appropriate.
(4) The Small Business Commissioner may, in acting under this section,
exercise any power of the Commissioner that applies under the Small
Business Commissioner Act 2011 in relation to the performance of
the Commissioner's functions under that Act.
(5) If the Small Business Commissioner determines that a public authority
should pay interest with respect to a qualifying debt under this Act, the public
authority must ensure that the interest, of an amount calculated by the
Commissioner, is paid in accordance with any determination of the
Commissioner.
(1) This section applies in relation to a public
authority—
(a) that is a government department; or
(b) that is a statutory authority that has a governing body.
(2) If a public
authority to which this section applies makes a payment of interest under this
Act in any month, the Chief Executive of the public authority must furnish a
report with respect to the payment of the interest to—
(a) in the case of a
government department—the Minister with responsibility for the department;
or
(b) in any other
case—the governing body of the public authority.
(3) The report—
(a) must contain any information required under a Treasurer's instruction;
and
(b) must be furnished—
(i) in the case of a report under
subsection (2)(a)—within
21 days after the end of the month in which the payment is made;
or
(ii) in the case of a report under
subsection (2)(b)—at
the next regular meeting of the governing body of the public authority occurring
after the end of the month in which the payment is made.
The Governor may make such regulations as are contemplated by this Act or
as are necessary or expedient for the purposes of this Act.
(1) The Treasurer must cause a report to be prepared about the
arrangements that will need to be in place to ensure that the scheme envisaged
by section 6(6)(b) will operate in an appropriate and effective
manner.
(2) The report must be
furnished to the Treasurer within 18 months after the commencement of this
Act.
(3) The Treasurer must, within 6 sitting days after receiving the
report under
subsection (2),
cause a copy of the report to be laid before both Houses of
Parliament.
Part 1—Preliminary
In this Schedule, a provision under a heading referring to the amendment of
a specified Act amends the Act so specified.
Part 2—Amendment of Public Finance and
Audit Act 1987
2—Amendment
of section 41—Treasurer's instructions
Section 41(1)—after paragraph (d) insert:
(e) setting out the procedures and processes for the rendering of invoices
and claims with respect to public authorities, to specify a public authority or
other entity to which specified classes of invoices or claims must be rendered
or sent, to make provision with respect to the form of any invoice or claim, and
to make any other provision with respect to the payment of debts by a public
authority (including in connection with a scheme to provide for the payment of
interest due to the late payment of specified classes of debts).