Security of payment reforms need to go further say subbies
PROPOSALS to ensure security of payment for sub-contractors in the building and construction industry may not go far enough, says a contractor dedicated to reform of the industry.
Wave 5 sub-contractor Jo Franklin was a leader of a group of 23 local sub-contractors working on the Pacific Highway bypass left out of pocket when Queensland construction group Ostwald Bros collapsed midway through last year.
They battled for nearly a year to win an ex gratia payment from the NSW Government to cover their losses and have campaigned for reforms to the industry to guarantee payment security.
NSW Better Regulation Minister Matt Kean has released a consultation paper for a proposed Building and Construction Security of Payment Act.
The paper seeks industry input on proposals to create statutory trusts that building and construction companies would contribute to during a development, quarantining money that would be used to pay their sub-contractors.
Contractors would be able to make a payment claim at least once a month for work within that month, and a final claim where a contract has been terminated.
Ms Franklin said some of the worrying aspects of the proposed changes was a structure that could allow a principal contractor to control the trust structure.
"Matt Kean has said the trust concept proposed would be open to the likes of a principal contractor to become the trustee," she said.
She said she was also worried there were not enough legal protections for contractors who could still feel intimidated about seeking to be paid on time.
The contractors also said the consultation set the sights of the proposed regulations too high for the "mum and dad"-sized companies.
"This trust concept is only applicable to projects $1million to $20million," Ms Franklin said.