The New Zealand Government has announced that it will rewrite Rule 51 of the Government Procurement Rules to ensure government agencies pay invoices faster and adopt labour-saving technology through eInvoicing.
Implemented as part of the Government’s plan to rebuild the economy and support small businesses, the new Rule will mean agencies that send or receive more than 2,000 domestic invoices a year must have eInvoicing systems in place and will be required to pay all domestic eInvoices within five business days by 1st January 2026.
Government agencies within this number include ACC, Waka Kotahi, Health NZ and NZ Police.
In the meantime, around 135 government agencies will be required to pay 90 percent of all domestic invoices within 10 business days from 1st January 2025, which will increase to 95 percent from 1st January 2026.
Small Business and Manufacturing Minister Andrew Bayly said the Government is ambitious about lifting New Zealand’s economic productivity and improving public sector efficiency, which means adopting smarter ways of working.
“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,” he said.
“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 percent of all businesses in New Zealand are small businesses, it is crucial for our broader economic success that government agencies pay their invoices quickly.”
Mr Bayly said the push to incorporate eInvoicing systems will lead to significant productivity gains over paper and 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,” he added.
Economic Development Minister Melissa Lee said 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.
“These changes will help to move money faster around our economy and drive significant economy-wide productivity improvements.”
The New Zealand Government will also begin consultations with businesses, which will require certain government suppliers to send eInvoices as part of the Government Procurement Rules, with the outcomes of these consultations due to be reported back to Cabinet by February 2025.
