AMCA Makes Submission to Review of Security of Payment Laws

Published: 4 April 2017

Insolvency in the building and construction industry is unacceptably prevalent, as evidence by the recent parliamentary inquiry that found that more insolvencies occur in the building industry than all other industries combined.

Several reasons for this exist; however, in the view of the AMCA, it is the causal role played by delayed payment practices that is most critical for subcontractors who are significant employers of workers onsite and have frequently cited delayed payment as the source of financial stress.

The variation of Security of Payment legislation around Australia means that there are differing views as to the merits of different design and administrative elements; however, overall it has assisted contractors seek expedited payment that would otherwise have had to go through a full dispute resolution process to recover monies.

Even so, Security of Payment remains a significant concern for subcontractors, many of which are small and medium sized enterprises, often family owned businesses.

We highlight the following basis for our submission:

  • Given each state has enacted its own version of Security of Payment legislation, it is reasonable to assume that the intent of the respective state legislation, and the issues they seek to address, are largely the same. We therefore advocate for a single, harmonised model legislation. Any recommendations made in this submission, therefore, relate to this preferred model legislation. 
  • Representing the concerns of our membership, the AMCA submission focuses primarily on the issues confronting subcontractors in the commercial sector; however, we also acknowledge the concerns of other segments of the contracting chain, and have sought to present recommendations (where possible) that we believe would improve the overall confidence of industry in the Security of Payment system.
Download the AMCA's submission here