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The Airconditioning and Mechanical Contractors Association (AMCA) has welcomed the federal government's review into security of payment laws in the building and construction industry.

Currently, these laws are different in each state across Australia which has a significant impact on the level of protection afforded to subcontractors.

In its submission the AMCA said the review is critically important for subcontractors because insolvency in the building and construction industry is unacceptably high.

AMCA executive director, Sumit Oberoi, said competition is fierce among contractors.

“The situation is made worse because tenders are often selected based on the lowest price,” he said.

“Security of payment is also a big concern because most subcontractors are small to medium sized enterprises, often they are family owned businesses.”

The government has appointed John Murray to undertake the review. Murray became a Member of the Order of Australia in 2014 for his service to the building industry.

He will prepare a final report with recommendations for the government to consider by December 31, 2017.

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