Richard Bruton (Dublin North Central, Fine Gael)
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Question 130: To ask the Minister for Enterprise, Trade and Employment if he has considered shortening the payment time for all public sector invoices to improve the cash flow of the private sector at this difficult time. [14765/10]

Batt O'Keeffe (Cork North West, Fianna Fail)
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Public sector bodies are subject to the European Communities (Late Payment in Commercial Transactions) Regulations 2002 (S.I. No. 388 of 2002). 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 (i.e. specified in the contract), late payment interest falls due after 30 days has elapsed, provided the invoice is not subject to query. Interest applies until such time as payment is made by the purchaser. The current late payment interest rate from 1 January 2010 is 8% (that is based on the ECB rate of 1% plus the margin of 7%). The Regulations also provide for compensation for debt recovery costs.

In accordance with the Government's Decision of 19 May 2009 all central Government Departments are now required to pay their business suppliers within 15 days of receipt of a valid invoice. As a result, Departments are required to give greater priority to making timely payments and to ensure that suppliers themselves are aware of how they can assist the process by meeting the requirements of Departments in relation to the submission of invoices. Departments are also required to report quarterly to my Department on their performance in meeting this target.

On the basis of figures published by my Department in respect of the last two quarters of 2009, Government Departments are continuing to make strong efforts to pay their suppliers within 15 days and are having an impact in assisting Irish SMEs cash flow in the current difficult economic environment.

I believe there is scope to shorten public sector payment periods in areas beyond the central Government Departments and I will be bringing forward appropriate proposals shortly.