A major review into security of payment laws has recommended the implementation of a national model of legislation to give protection to individuals and small businesses involved in subcontracting in the building and construction industry.
The recommendation was one of 86 made in the review by John Murray AM, a specialist in resolving building contract disputes and security of payment legislation.
Minister for Small and Family Business, the Workplace and Deregulation, Craig Laundy, said the Federal Government commissioned the review to look at protections for individuals and small businesses involved in subcontracting in the building and construction industry.
“For these operators, delayed and disputed payments can make or break them,” Mr Laundy said.
He said uniform, Australia-wide legislation was vital in tackling the problem of non-payment.
“More needs to be done to harmonise the various state and territory security of payment 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,” Mr Laundy said.
Master Builders Australia has added its support to the call for uniform legislation across the country.
“(We) have long supported the goal of greater uniformity and consistency of security of payment law across the states and territories to increase industry understanding, clarify uncertainty, reduce complexity and boost payment compliance outcomes,” Master Builders Australia chief executive Denita Wawn said.
Master Builders Australia chief executive Denita Wawn.
Meanwhile, the CFMEU has called on the Turnbull Government to immediately implement another recommendation in Mr Murray’s report, that progress claims and retention monies be held in statutory trusts.
The union said such a move would ensure that subcontractors were protected and workers could be paid.
“When clients pay builders on progress claims, builders are meant to pay subcontractors,” CFMEU national construction secretary Dave Noonan said.
“However, builders basically treat that money as their own and often don’t pay their subcontractor.
“When funds are held in statutory trusts, it is harder for builders to screw over their subcontractors, and the workers they employ.”
Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, said she supported the focus on improving consistency in legislation and enhancing protections for subcontractors, including by holding payments in statutory trusts.
“Statutory trusts will go some way to alleviate the problem of subcontractors not being paid as the result of illegal phoenix activity,” Ms Carnell said.
The final report is available at www.jobs.gov.au/review-security-payment-laws
