News & Views

NECA Brings Together Subcontractor Associations to Call for National Security of Payment Reforms

The building and construction industry employs over 1.2 million Australians, and the lack of payment protection is an incredibly concerning and deep cultural problem across the sector with urgent reforms needed to ensure the system is working for businesses and consumers.

NECA on behalf of its members brought together representatives from union and peak building and construction industry subcontractor associations, to call on the Commonwealth Government to honour its pre-election promise and immediately implement payment protection policy as recommended in the Review of Security of Payment Laws: Building Trust and Harmony report by Mr John Murray AM.

Meeting with Mr Murray at the Security of Payment Industry Forum hosted by Mr Oliver Judd, NECA CEO, industry representatives signed a Statement of Agreement outlining key actions to the Commonwealth Government to address the inconsistent and inadequate regulations and take action to protect the rights of all industry participants. These actions include:

1. Urgently enact federal Security of Payment laws to implement the Murray Report  

• Remove the confusion and inconsistency between current laws by enacting a single framework for security of payment that will apply consistency across Australia.
• Within three months, prepare the draft legislation for consultation with industry and other stakeholders.
• Ensure that the draft legislation reflects the recommendations in the Murray Report including provision for cascading statutory trusts in favour of sub-contractors and sub-sub-contractors.

2. Strengthen prohibitions for unfair contract terms 

• The use of unfair contract terms in construction subcontracts is strongly linked to security of payment issues and greater protection against unfair contracting are urgently required.
• In addition to immediately implementing the recommendations stated in the Murray Report in relation to unfair contract provisions, the federal government must urgently progress the enhancement of business to business unfair contract laws under the Australian Consumer Laws (ACL). However, these enhancements must go further for the construction industry.
• The federal government must also prohibit the use of specified types of unfair contract terms which have become common in the construction industry to make it clear that the use of such terms will not be tolerated.

3. Ensure the government procurement practices support fair contracting down the construction supply contractual chain

• Procurement policy and procedure for government construction projects must be reviewed and enhanced to proactively require head contractors to strictly comply with security of payment and unfair contract laws.
• Government must take steps to ensure that the content of head contracts is not contributing to unfair payment practices down the sub-contracting supply chain.

Click here to download a copy of the Statement of Agreement.

If your business is currently affected by non-payments, you can access legal assistance from NECA SA/NT by calling us on (08) 8272 2966.

As always, we welcome your views, so please get in touch with us if you have any feedback on NECA’s Security of Payment advocacy efforts, or if you would like to be involved in future discussions on the topic. 
 
Security of Payment Industry Forum, Parliament House Sydney 

Participating industry representatives at the Security of Payment Industry Forum: 

• National Electrical and Communications Association
• Master Plumbers Australia New Zealand
• Master Electricians Australia
• National Fire Industry Association Australia
• Electrical Trades Union
• Refrigeration and Air Conditioning Contractors Association
• Specialist Contractors Association
• Air Conditioning and Mechanical Contractors Association
• Australian Small Business and Family Enterprise Ombudsman

Other attendees: 

• Author of the Review of Security of Payment Laws, Building Trust and Harmony Report – Mr John Murray AM
• Co-author the Building Confidence Report and Security of Payments Industry Forum facilitator – Ms Bronwyn Weir.