New laws promote prompt payment to subcontractors

• Legislation to protect payments to subcontractors in the construction industry 

Laws introduced by the Liberal National Government to protect payments to subcontractors in the construction industry have passed State Parliament.

Small Business Minister Sean L'Estrange said the Construction Contracts Amendment Bill 2016 made it easier for subcontractors to access the rapid adjudication process for resolving construction payment disputes.

Mr L'Estrange said the new measures provided building contractors, subcontractors and suppliers with the right to be paid within a reasonable period of time, and a low cost method of enforcing that right.

"The amendments are aimed at producing immediate improvements to the security of payment for subcontractors and other operators in the building and construction industry, many of which are small businesses," he said.

"This legislation complements changes already implemented by the Liberal National Government to roll out Project Bank Accounts across Building Management and Works construction projects, valued at more than $1.5 million."

Commerce Minister Michael Mischin said the amendments reduced the maximum payment terms permitted in construction contracts to 30 business days, which would come into effect on April 3, 2017.

"The improvements are expected to deliver more prompt payment of subcontractors and increased cash flow in the building and construction industry," Mr Mischin said.

Other key changes, which will come into effect from December 15, 2016 include:

• increasing the time in which an application for rapid adjudication of a payment dispute can be lodged to 90 business days
• creating greater flexibility by allowing adjudication of unresolved disputes from earlier claims
• providing a faster and more efficient means for a party to enforce an adjudication determination through the courts. 

Fact File

• The building and construction industry in WA generates 12.5% of Gross State Product

• The sector accounts for 10% of the total workforce, including more than 40,000 small businesses

• The Building Commission will run training sessions on the Construction Contracts Act 2004 and contract management from December 5, 2016.  For further information, visit http://www.commerce.wa.gov.au/building-commission/events-and-seminars-0

• A subcontractor hotline has been established.  For information about the Act or the rapid adjudication process, call 1300 484 481 

Small Business Minister's office - 6552 6900

Commerce Minister's office - 6552 5600