Andrews government reportedly struggling to pay bills as it hurtles towards record debt level

The Victorian government is taking almost 10 times longer to pay suppliers than guidelines stipulate under its own Fair Payment Policy, it’s been claimed.

Companies dealing with government agencies say they have been told by public servants that they are struggling to pay for ordinary operating expenses.

The bureaucrats have in some cases told stakeholders they know they don’t have the money to cover the extraordinary increases they are incurring for essential goods and services.

The Sunday Herald Sun can reveal the government is in some cases now taking almost 10 times longer to pay suppliers than guidelines stipulate under its own Fair Payment Policy.

The shortfalls are understood to have affected some of the government’s largest government agencies but affected parties have requested that the Sunday Herald Sun not identify them.

One creditor owed money by the state government, Stuart King, from Swan Hill Hire, rented more than $1m of equipment to the SES during last year’s flood recovery effort.

He said he had now been waiting three months for the government to pay an outstanding amount of $100,000 from a $300,000 invoice.

“I’ve got invoices from November and December and it’s now April,” Mr King said.

“My accounts team has spoken to them on a number of occasions, but they’re just blaming slow processing.”

Stuart King, from Swan Hill Hire, rented more than $1m of equipment to the SES during last year’s flood recovery effort. He is still waiting on payment. Picture: Supplied, ,

Mr King rented pumps, generators, and vehicles to the SES as well as sources other hard equipment.

“I hired a 750 KVA generator, which is not something you have sitting around in a hire shop in Swan Hill, it’s worth nearly a million dollars, the total invoice for that was about $70,000 and I’ve been paid $15,000,” he said.

Mr King said in years of dealing with government and local councils, he’d never waited so long to be paid.

“You trust that you’re dealing with a government department, you’ll get paid,” he said.

“So I expect I’ll get paid but I shouldn’t have to wait three months for it.

Mr King said under normal circumstances debt collection proceedings would be issued for payments not received after 90 days.

the blowout in bill payments comes as Victoria’s interest bill is now costing taxpayers $10m a day as the state hurtles toward a record debt level of $165.4bn by 2025-26, with interest payments set to almost double by that time.

The government is scrambling to rein in spending ahead of May’s budget, with major cuts expected to the public service and critical funding for community and not-for-profit organisations.

The anticipated cuts would be the biggest in more than a decade – when former premier Ted Baillieu pushed to slash 3600 jobs.

Transport and health, along with key election commitments, have largely been spared from the budget’s Razor Gang.

Nationals leader Peter Walsh has slammed the government’s ongoing failure to pay for services rendered. Picture: Nicki Connolly

Nationals leader Peter Walsh slammed the government’s ongoing failure to pay for services rendered.

“Labor has again shown they can’t be trusted to handle money,” he said.

“Labor has failed to meet their own policy of paying flood devastated businesses within 10 days of lodging their invoices.

“Daniel Andrews has let hardworking family businesses down, and his empty promises have shown he doesn’t care about the businesses that delivered vital services during the flood event.”

A government spokesperson said it was working to finalise further outstanding payments.

The government’s Fair Payment Policy reduced payment terms to suppliers from 30 days to 10 days in 2021.

“The government’s policy is to ensure suppliers are paid within 10 business days of receiving a correct invoice – twice as quick as the national code,” she said.

“This practice has not changed.”