Tracking Prompt Payments from Public Contractors to Subcontractors and Suppliers to Deliver Public Contracts

Parliamentary Question by Mr Victor Lye:

To ask the Prime Minister and Minister for Finance (a) whether the Government has studied the United Kingdom's requirement for 30-day payment terms to flow through qualifying public procurement subcontracts and payment spot checks; and (b) whether a similar approach could be piloted for major Singapore public-sector contracts.

Parliamentary Question by Mr Victor Lye:

To ask the Prime Minister and Minister for Finance whether the Government will consider (i) tracking that payments made promptly by public agencies to principal contractors are subsequently paid promptly to subcontractors and suppliers engaged to deliver the same public contracts and (ii) requiring major public contractors to report their subcontractor payment performance.

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Parliamentary Reply by Second Minister for Finance, Mr Jeffrey Siow:

The Government recognises the importance of prompt payment throughout the supply chain, including payments from principal contractors to their subcontractors and suppliers. Timely payment supports business cash flow and strengthens supplier relationships.

The Government is committed to paying our suppliers promptly. However, payments between principal contractors and their subcontractors or suppliers are commercial arrangements between private parties which the Government has less visibility on.

The Government will continue to work with our Trade Associations and Chambers to study the payment practices of other countries, such as the United Kingdom and Australia, to strengthen payment practices. We are supportive of the workgroup set up by the Singapore Business Federation to develop a Prompt Payment Code of Conduct to encourage fair payment practices between businesses. The workgroup will study how the key learning points from overseas models and private sector practices can be adapted to Singapore's business environment.