Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Monday, 11 May 2020
The Government continues to improve its procurement and contracting arrangements to help support Australian businesses providing goods and services to Government.
Despite the significant impacts of COVID-19 on the global economy the Australian Government remains a strong purchaser of goods and services. The Government recognises that businesses of all sizes play a vital role in the delivery of key outcomes for the Government and the Australian community.
The COVID-19 disruption has had an adverse effect on the supply of equipment, materials and services required to carry out normal business processes for the Government and the economy more broadly.
To ensure they are making appropriate arrangements with suppliers impacted by the Coronavirus health crisis, the Department of Finance have set the expectations for engagement by Government agencies,
New guidance has been published asking Commonwealth departments and agencies to work collaboratively with suppliers to ensure business continuity and to take action, where appropriate, to ensure that supply chains are able to be maintained. This includes:
- relaxing or waiving some contractual rights where appropriate to address COVID-19 circumstances;
- generally avoiding exercising of termination rights or liquidated damages; or
- revised payment arrangements.
The Government also expects agencies to pay suppliers quicker than the maximum 20 day payment terms, and is making payments of electronic invoices within five days where suppliers and agencies have adopted e-invoicing consistent with the international standard. Small invoices under $10,000 should be paid immediately by card payment systems. This will assist businesses with their cash flow and support jobs.
In addition, the Department of Finance and the Department of Defence have established a Procurement Hub, working together to assist agencies with specific COVID-19 related procurement activities. The Procurement Hub is providing assistance to agencies through advice, technical solutions and resources where required.
The Government will continue to look for opportunities to provide support to the Australian economy and to keep businesses in business.