Subcontractors in the building and construction industry will have increased payment protections for Government works projects under changes to be introduced in 2019.
The McGowan Labor Government will significantly expand Project Bank Accounts (PBAs). This will come into effect from July 1, 2019.
PBAs will apply to a wide range of Government projects where the total value of works exceeds $1.5 million.
The State Government will provide a definite guide to which projects will be covered in early 2019.
PBAs provide better protection to subcontractors and, consequently, reduces the financial stress on them, their employees, suppliers and families.
Additionally, PBAs improve the speed of payment for subcontractors and increase transparency in the payment process.
A Subcontractor Support Unit will also be established and overseen by the Small Business Commissioner. The Commissioner will have the power to:
- Compel head contractors on Government projects to prove payment to subcontractors
- Shield subcontractors from retribution for lodging complaints, by allowing them to be anonymous
- Conduct random and targeted audits, based on intelligence and tip offs
- Make recommendations to Government to sanction head contractors, ultimately impacting on their future procurement opportunities in Western Australia
- Showcase best practice contractors in the State
The unit is expected to be operating in the first half of next year.
Comments attributed to Small Business Minister Paul Papalia
"Building and construction is a high-risk industry for small businesses, with subcontractors exposed to high levels of late payments, non-payments and insolvencies.
"As Minister, it disturbed me how little was done under the previous government to step in to protect subcontractors - some of our most vulnerable small businesses in the State.
"These changes represent the first of their kind in Western Australia.
"It will no longer be acceptable for a head contractor on Government-led projects to fob off their responsibilities. The McGowan Government will set an example for the private sector by ensuring all subcontractors are rightfully paid.
"I look forward to the Commissioner being empowered to receive proof of payment and to showcase our most deserving, best practice contractors."
Comments attributed to Commerce and Industrial Relations Minister Bill Johnston
"One of the McGowan Government's election commitments was to improve payments to Western Australian subcontractors, and we are delivering on this promise.
"These new arrangements will better protect subcontractors, financially, when assigned to work on State Government projects.
"I look forward to releasing John Fiocco's report into the security of payments to subcontractors very soon."
Comments attributed to Finance Minister Ben Wyatt
"This measure will improve the position of subcontractors, both in the short term and into the long term.
"The Government will begin to rollout the Project Bank Account arrangements, which currently apply to the majority of projects administered by the Department of Finance, to as many projects as practicable from July 1, 2019."
