New Government action to help tradies get paid on time and in full

The Albanese Labor Government is taking further action to help ensure tradies and subcontractors in the construction industry are paid on time and in full.

Our immediate actions are:

• Leveraging 20-day maximum payment times through the Commonwealth Supplier Code of Conduct and promoting similar expectations of Government Businesses like the NBN, Western Sydney Airport and Inland Rail.
• Extending unfair trading practice protections to small businesses.
• Boosting funding for ASIC to identify and take enforcement against more dodgy directors for illegal phoenixing conduct, focusing on the sectors that are more at risk of such conduct like construction. 

We are also releasing the Government’s response to the Review of Security of Payment Laws.

The Review of Security of Payment Laws (the Review), undertaken by Mr John Murray AM, recommended ways to improve consistency across the different state and territory laws on security of payment to foster a fairer and more resilient construction sector.

Since the release of the Review many states and territories have amended security of payment laws, but the former federal government failed to respond.

Today our Government is reaffirming its commitment to fairness and bolstering support for small businesses that are contractors, subcontractors and suppliers in the construction sector.

We are taking action to support the objectives of the Murray Review, including:

• progressing our tripartite work with businesses and unions on a Building and Construction Industry Blueprint to develop effective arrangements to protect the security of payments for contractors down the supply chain;
• leveraging the Commonwealth Supplier Code of Conduct which requires suppliers contracted to non-corporate Commonwealth Entities to reflect the Commonwealth’s maximum payment times in their contracts with subcontractors, and by promoting similar expectations of Government Businesses;
• using wider policy levers to assist small businesses facing an imbalance of bargaining power, such as, providing guidance to help identify unfair contract terms in standard contracts, and extending unfair trading practices protections to small businesses;
• taking action to support the adoption of eInvoicing; and
• boosting funding for ASIC to improve its ability to identify and take enforcement action against those involved in illegal phoenixing conduct, focusing on the sectors that are more susceptible and impacted by such conduct, particularly construction. 

This builds on the Albanese Labor Government’s significant achievements to date through the Building Ministers’ Meeting, the National Construction Industry Forum, the overhaul of the Payment Times Reporting Scheme and the introduction of new laws for disputes about unfair contracts for independent contractors.

Quote attributable to the Minister for Small Business, the Hon Julie Collins MP: 

“Australia’s construction sector is a cornerstone of our economy, employing over 1.36 million people across more than 452,000 businesses.

“We are ensuring the nation’s security of payment laws get subcontractors paid on time for their hard work, so that the sector is set up to deliver success for the country.

“After the former Coalition failed for years to take action, we are progressing meaningful reforms that will help small businesses. 

“Our actions will improve cashflows of small construction businesses, recognising their pivotal role at the heart of our economy.

“It’s part of our broad agenda to support the sector across a range of portfolios with measures including housing targets, sustained investment in infrastructure and the transition to renewable energy.”

Quotes attributable to Minister for Employment and Workplace Relations, Murray Watt:

“Lack of security of payments mean contractors don’t get paid and workers don’t get their entitlements – this is totally unacceptable in any workplace. No-one should ever be expected to operate under the shadow of constant financial insecurity and uncertainty about whether or not they will be paid in full for their work. 

“We acknowledge the careful and thorough work of Mr John Murray AM in undertaking this important Review into Security of Payments into the construction industry. While the Coalition failed to even respond to the Murray Review, we understand there is an urgent need to address this longstanding problem. 

“Our response to the Murray Review highlights the meaningful steps we have taken - and will take - to address this issue, while acknowledging there is more to do. 

“Through our Government’s National Construction Industry Forum, I and other responsible Ministers are engaging with businesses and unions on a new Construction Industry Blueprint to be released in the coming months, which I fully expect will highlight security of payments as a priority issue for the industry.”

Quotes attributable to Assistant Treasurer and Minister for Financial Services, the Hon Stephen Jones MP: 

“There is no place in our economy for dodgy directors who phoenix their companies and leave behind a trail of unpaid wages, lost jobs, and small businesses struggling to recover.

“More funding for ASIC to go after phoenixers means they can’t walk away scot-free while others bear the cost.”

Quotes attributable to the Assistant Minister for Competition, Charities and Treasury, Andrew Leigh MP:

“Too often, small construction businesses are left chasing payments from bigger players who treat them as an interest-free loan.

“These reforms will help level the playing field, making sure tradies and subcontractors get paid on time and in full. A fair market isn’t one where the biggest players use delay tactics as a business model.

“Cash flow is the lifeblood of small business. When payments stall, so does competition. We're making sure builders and subcontractors can focus on their work, not their unpaid invoices."