Media statement from Commerce Minister Sue Ellery
- Final stage of improved protections for building and construction subcontractors now in effect
- Landmark reforms to ensure timely payments across the contracting chain
- Three-year project delivered new legislation, a retention trust scheme, fairer contracting practices and strengthened regulatory powers
The Cook Government has delivered on its commitment of landmark reforms to ensure subcontractors receive payments on time for their work in the building and construction sector.
The final stage of the Building and Construction Industry (Security of Payment) Act 2021 (the Act) commences today, completing a three-year project to implement payment protections across the contracting chain in the event of an upstream insolvency.
Protections introduced so far have included:
- more structured and transparent payment processes;
- fairer contracting practices;
- expanded rights to claim regular payments to avoid large outstanding invoices;
- an effective dispute resolution pathway;
- an Australian-first retention trust scheme across the supply chain; and
- greater powers against building service providers with a history of financial failure or those who fail to pay debts to subcontractors.
From today, the financial threshold for the retention trust scheme will be lowered from $1 million to new eligible construction contracts over $20,000 (including GST). It is also now an offence to not fulfil certain requirements of the scheme.
The retention trust scheme under the Act requires retention money withheld under eligible construction contracts to be held in a retention money trust account with a recognised financial institution.
Fairer payment rights, allowing for a transparent process for contractors to access cash retention money withheld against them, also come into effect today.
