Seán Barrett (Dún Laoghaire, Fine Gael)
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Question 38: To ask the Tánaiste and Minister for Enterprise, Trade and Employment when she will honour the commitment to ensure that the State and its agencies pays its bills to business within 15 days; the recourse a business has when payments are not made in this time frame; and if she will make a statement on the matter. [13479/09]

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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On 5 March 2009, the Taoiseach announced that the Government is introducing on an administrative basis, a commitment to reduce the payment period by central Government Departments from 30 to 15 days and that an assessment will be completed by end-April of the impact of extending this arrangement to the local authority, health and education sectors. My Department is currently working on the specifics of implementing this arrangement and I will be circulating proposals to Government Departments shortly.

The arrangement will not seek to alter the legal position in relation to late payments. The terms of the European Communities (Late Payment in Commercial Transactions) Regulations 2002 (S.I. No. 388 of 2002) will continue to apply. Under these Regulations, it is an implied term of every commercial transaction that where a purchaser does not pay for goods or services by the relevant payment date, the supplier shall be entitled to interest ("late payment interest") on the amount outstanding. In the absence of any agreed payment date between the parties, late payment interest falls due after 30 days has elapsed. Interest shall apply until such time as payment is made by the purchaser. The current late interest rate from 1 January 2009 is 9.5%. The 2002 Regulations also provide for compensation for debt recovery costs.

Implementing the arrangements should result in Government Departments paying their suppliers within the 15 day limit and should also result in Departments providing clear and precise information and contact points to suppliers concerning the handling and processing of their payments. This should assist in easing the cash flow difficulties for small business given the current economic circumstances. As part of the process, my Department will monitor the performance of Departments in complying with the arrangement and will publish the results on a regular basis.