The Federal Government has released its final report on Security of Payment laws which reviewed protections for small businesses involved in subcontracting in the building and construction industry.
Minister for Small and Family Business, the Workplace and Deregulation, Craig Laundy, released the report yesterday which was undertaken by John Murray AM, a specialist in resolving building contract disputes and security of payment legislation.
Laundy said the report makes 86 recommendations to improve consistency in security of payment legislation and enhance protections to ensure subcontractors get paid on time for work they have done, regardless of which state or territory they operate in.
"For these operators, delayed and disputed payments can make or break them,” Laundy said.
A key recommendation is to make security of payment laws nationally consistent and to base it on the East Coast Model, which is modelled on the NSW security of payment legislation.
"As legislative responsibility for security of payment rests with the states and territories, the Government will work cooperatively with them on the findings of the review,” Laundy said.
"As Chair of the Building Minister Forum, I am committed to working closely with all Building Ministers around the country to deliver improvements to the building and construction sector which are long overdue."
On average, payments are 26.4 days late which explains why the construction industry in Australia accounts for 20 to 25 per cent of all insolvencies.
"More needs to be done to harmonise the various state and territory security of payments laws so that businesses and subcontractors operating in the building and construction industry are not required to be across several complex pieces of legislation at any given time," Laundy said.
"More also needs to be done to ensure that, where payments are protected, this protection flows through the entire contractual payment chain, not just to the first tier of building industry participants, as has been the case under various trials of Project Bank Accounts including currently in Queensland.
"The Government will consult with industry to consider the report’s recommendations and explore ways to improve the protections for individuals and businesses involved in subcontracting in the construction industry.”
The final report is available at www.jobs.gov.au/review-security-payment-laws.