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Late Payment of Government Debts (Interest) Bill 2007

Part 1—Preliminary

1 Short title

This Act may be cited as the Late Payment of Government Debts (Interest) Act 2007.

2 Commencement

This Act commences on the day on which it receives the Royal Assent.

3 Objects

The objects of this Act are to:

                     (a)  improve the payment culture of government by penalising late payments of its commercial debts to small businesses; and

                     (b)  compensate small businesses for the impact on their cash flow of receipt of late payment of government debts.

4 Definitions

In this Act, unless the contrary intention appears:

Commonwealth agency has the same meaning as agency in the Financial Management and Accountability Act 1997.

consumer credit contract means a contract for the supply of credit where the credit is provided or intended to be provided wholly or predominantly for personal, domestic or household purposes.

contract for the supply of goods and services means:

(a) a contract for the sale or transfer of goods; or

(b) a contract for the hire of goods; or

(c) a contract for the provision of services.

excepted contract means:

(a) a contract where the consideration for the sale, transfer, hire or service is not, or does not include, a money consideration; or

(b) a consumer credit contract; or

(c) a contract intended to operate by way of mortgage, pledge or other security.

purchaser , subject to section 12, means the buyer in a contract of sale of goods or the person who contracts with the supplier in any other contract for the supply of goods or services.

qualifying contract means a contract for the supply of goods and services, where the purchaser is a Commonwealth agency and the supplier is a small business, other than an excepted contract.

qualifying debt means a debt created by virtue of a qualifying contract.

rate of statutory interest means the General Interest Charge Rate provided by section 8AAD of the Taxation Administration Act 1953.

relevant day means:

(a) if the supplier and the purchaser agree a fixed or conditional date for the payment of the debt—that day, unless the debt relates to an obligation to make an advance payment; or

(b) if the debt relates to an obligation to make an advance payment—the day on which the debt is treated by section 11 as having been created; or

(c) in any other case—the last day of a period of 30 days commencing on:

(i)         the day on which the obligation of the supplier to whom the debt relates is performed; or

(ii)        the day on which the purchaser has notice of the amount of the debt or, where that amount is not determined, the sum which the supplier claims is the amount of the debt;

whichever is the later.

small business has the same meaning as small business entity in the Tax Laws Amendment (Small Business) Act 2007 .

statutory interest means interest carried by virtue of an implied term in a qualifying contract.

substantial remedy has the meaning given by section 10.

supplier , subject to section 12, means the seller in a contract of sale of goods or the person agreeing with the purchaser to transfer property in goods or provide a service in any other contract for the supply of goods or services.

5 Act binds the Crown

(1)     This Act binds the Crown in each of its capacities.

(2)     However, nothing in this Act makes the Crown liable to be prosecuted for an offence.