- Hon Melissa Lee
- Hon Andrew Bayly
New requirements for government agencies to pay their invoices faster and adopt labour-saving technology are an important part of our plan to rebuild the economy and support small businesses, Small Business and Manufacturing Minister Andrew Bayly and Economic Development Minister Melissa Lee say.
"The Government is ambitious about lifting New Zealand's economic productivity and improving public sector efficiency, which means adopting smarter ways of working," Mr Bayly says.
"Government agencies are a large client for businesses up and down the country, supplying everything from stationery and furniture, through to services such as software, security and research.
"The 33 central government agencies send and receive 1.6 million invoices annually, with the total number for all 135 government agencies likely many more millions.
"Prompt payment is especially important for small businesses which have limited cash reserves - an unpaid or late invoice can be the difference between being able to pay staff on time or not.
"Given 97 per cent of all businesses in New Zealand are small businesses, it is crucial for our broader economic success that government agencies pay their invoices quickly.
"There are also significant productivity gains from adopting eInvoicing, instead of paper or emailed PDF invoices. eInvoicing allows invoices to be processed digitally, reducing instances of human error and fraud. Estimates suggest that adopting eInvoicing could generate productivity savings of $4.4 billion over the next 10 years."
Having invoices paid on time can mean a world of difference to small and medium sized businesses, Ms Lee says.
"Government agencies should be leading by example, and that's why I'm rewriting Rule 51 of the Government Procurement Rules so more government agencies adopt eInvoicing and pay their suppliers promptly.
"Government agencies spend approximately $51.5 billion a year on procurement. We can leverage this purchasing power to drive innovation and productivity, and boost our economy.
"From 1 January 2026, agencies that send or receive more than 2,000 domestic invoices a year must have eInvoicing systems in place. These agencies will be required to pay all domestic eInvoices within five business days.
"To facilitate faster payments in the meantime, I am setting an explicit requirement for around 135 government agencies to pay 90 per cent of all domestic invoices within 10 business days, from 1 January 2025. This will increase to 95 per cent from 1 January 2026.
"These changes will help to move money faster around our economy and drive significant economy-wide productivity improvements."
Notes to editor
- A list of agencies required to apply the Government Procurement Rules is available here: www.procurement.govt.nz/about-us/mandate-and-eligibility/.
- A wider review of the Government Procurement Rules is currently underway. MBIE will provide recommendations on updated Government Procurement Rules in 2025.
