ALL public sector bodies will have to pay their bills on time or face fines when a new Prompt Payment Bill comes into effect, CIE, Aer Lingus and Telecom Eireann will have a one year "transition" period before they have to comply. Some 214 public sector bodies pay about £2.3 billion for goods and services every year.
Announcing yesterday that the Government had approved his proposals for a Bill, the Minister for Enterprise and Employment, Mr Bruton, said he expected to bring it to the Dail "early in the new year".
Questioning the need for a transition period for three of the 214 bodies covered by the Bill, the Fianna Fail spokeswoman on enterprise, Ms O'Rourke, said she announced over a month ago that she was introducing a prompt payment Bill in private members time. She said the Minister was "clearly trying to steal my thunder".
Aimed at answering criticisms from small business about late payment, the Government Bill will require all public sector bodies to pay the amounts due to suppliers on or before the date specified where there is a written contract.
Where there is no written contract, payment must be made within 45 calendar days of the receipt of an invoice or the date of supply, whichever is later.
There will be provisions to stop public bodies from trying to put unduly long credit periods into written contracts. They will be required to publish details of their payment practices in their annual reports and to submit an annual review of these practices to the Minister.
Bodies which fail to pay on time will face interest penalties on the amount owed. The penalties will be decided by the Minister.
Mr Bruton said he was reviewing the situation in the private sector and would consider whether legislation should be extended to private sector purchasers.
"Late payment is a major problem for small businesses. It causes cash flow problems, requires the extension of overdraft facilities, takes up scarce management time and contributes to business failure," Mr Bruton said.
Welcoming Mr Bruton's announcement, the Small Firms Association said late payments costs small firms about £50 million each year.
But the Irish Small and Medium Enterprises Association (ISME) asked why there was to be further delay in enacting late payment legislation. Mr Bruton has committed to "drafting a Prompt Payment Bill" despite the submission by ISME of a draft Bill two years ago and Fianna Fail's plan to publish a draft Bill on Monday, Mr Frank Mulcahy said.
