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Security of Payment Reforms

Posted by Fair Trading NSW on 31 August 2018

The Building and Construction Industry Security of Payment Act 1999 (the Act) is designed to ensure that a person can receive payments under a construction contracts for carrying out construction work, or providing goods and services related to construction work. 

The Act claims to ensure that contractors and subcontractors are paid promptly, that cash is moved down the contracting chain faster and that disputes over payments can be resolved fairly and quickly. 

In response to a full review of the ACT, commencing in 2015, NSW Fair Trading has released an exposure draft Bill, with accompanying explanatory statement, and a consultation paper on a proposal for a satutory trust for public consultation. 

The Building and Construction Industry Security of Payment Amendment Bill 2018 (the Bill) seeks to strengthen the security of payment framework while improving the operation of the Act and facilitating greater confidence within the industry of the Act's ability to facilitate cash flow along the construction chain. 

The NSW Government seeks public and stakeholder feedback on a proposal for a satutory trust for the Governments consideration as part of the NSW Review. Recent collapses in NSW have reinforced the need to effectively protect subcontractors from consequences of contractor insolvency. 

Consultation closes for both the Bill and the consultation paper on 18 September 2018. 

What are the proposed changes? 

Key reforms include: 

  • providing a statutory minimum entitlement to make a payment claim at least once per month, for work done within that month, 
  • re-inserting the requirement for the endorsement of payment claims, 
  • allowing claimants to make a final payment claim where a contract has been terminated, 
  • shortening payment due dates, 
  • enabling the Minister to make a code of practice for authorised nominating authorities, 
  • new investigate and enforcement powers to investigate, monitor and enforce compliance with the Act. 

To have your say on the Bill or consultation paper, please click here for further information and documentation required. 

 

Author: Fair Trading NSW
Tags: Industry News Consumer Information

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