Subcontractors victims of government inaction

Among several large projects that Quasar had been working on is the Western Sydney International (Nancy-Bird Walton) Airport project. A marquee infrastructure project for both the Federal and NSW State Governments.

This situation raises significant concerns for subcontractors who may not be compensated for their work on this contract, many of whom are already operating amongst extremely difficult economic circumstances.

During the Albanese Government’s election campaign, the commitment to protect the rights of small businesses and ensure security of payment in the building and construction industry was a cornerstone of the Liberal platform, by way of implementing the Murray Review, in its entirety.

A similar commitment was made to Senator David Pocock in November 2022, whereby the Federal Government agreed to “consider and respond” to the Murray Review recommendations within the current term of Government, in exchange for Senator Pocock’s support of the Secure Jobs, Better Pay Bill.

The Western Sydney International Airport project, now stands as a glaring example of the severe challenges facing the construction industry, particularly concerning security of payment.

Despite the scale and importance of this project, the situation surrounding Quasar Constructions illustrates how vulnerable subcontractors are in the current framework.

It is unacceptable that those who contribute to such significant national projects are left at risk of non-payment and financial instability.

This situation not only undermines the integrity of the project itself but also casts a shadow over the entire construction sector, highlighting the urgent need for reforms to ensure that all workers are fairly compensated for their contributions.

To date, The Federal Government have established the National Construction Industry Forum (NCIF) which have been tasked with advising Government on a host of matters, including Security of Payment reform.

With less than 12 months to the next federal election, the NCIF continues to expand in scope with Master Builders Australia and the Australian Constructors Association being added to the forum last month.

The NCIF is now being asked to advise on new matters, including to act as a “conduit through to which to move the building and construction industry away from the longstanding and recently high-profile allegations of lawlessness”.

To date, there have been no formal recommendations passed to government on security of payment reform by the NCIF, as Australia surpassed 3,000 construction industry insolvencies within the first six months of 2024.

This latest insolvency highlights the fact that even those contractors working on government projects are not being protected by the inadequacy of the current legislation.

The situation faced by our subcontractors and their families is desperate, with many on the brink of financial ruin.

The stress and uncertainty are taking a significant toll on mental health and wellbeing, and we are already seeing a concerning loss of skilled workers from the construction industry during an ongoing skills shortage.

It is imperative that the government takes decisive action now to address these issues; we cannot afford to wait any longer.

Quote from Oliver Judd – CEO, National Electrical and Communications Association

“It’s almost farcical that The Murray review, which was handed down in 2017 has sat on the shelf whilst more and more construction businesses go to the wall.

We’ve been promised time and time again that security of payment would receive the attention it deserves whilst the government has done nothing but handball this important reform from department to department until finally passing it to industry to advise on how best to proceed.

We now sit less than 12 months out from an election with the Federal Government seemingly no closer to an outcome capable of protecting our subcontractors.

Enough of the stall tactics, it’s time for the government to deliver on their promise, enact this reform, and protect the thousands of construction industry contractors who are sent to the wall each and every year”.