Mr KIELY - 2004-10-14
Today, the Martin government announced a construction industry reform package. Can you explain what the Construction Contracts (Security of Payments) Bill will do for the industry?
ANSWER
Madam Speaker, I thank the member for his question. One of the worst things you see around construction projects is for young home buyers to lose their money, as my colleague pointed out in a previous question. Probably one of the other terrible things you see is when subbies do a lot of work on a project and then find that they are not being paid because of the insolvency of the prime contractor or some other defect in the contractual arrangements.
Up to the present time, we have been bound by the Workmen’s Liens Act on such matters; an act that was originally written in about the 1890s in South Australia. We are really using something out of the dark ages. The legislation we are putting through parliament now is to create a certainty of payment and of rights for subcontractors working on these construction projects. It is long overdue.
It is devastating for a small business, such as a subbie, to find that they are hung up, not getting paid for long periods of time. Their business can often be put completely out of existence. The other thing that happens, of course, is that putting a lien on the property that is the subject of the construction also often holds that property bound up for many years when there is a court action in progress.
This legislation will create very clear rights for the subbies. It bans ‘pay until paid’-type clauses in contracts that would allow prime contractors to withhold payments to these subcontractors. It also provides a very simple, straightforward process of adjudication if there is a dispute over the payments under a contract. This is long overdue.
Madam Speaker, we are here supporting our subbies and cleaning up the construction industry so that we have a really good industry that can grow in the Territory with our economy.
ANSWER
Madam Speaker, I thank the member for his question. One of the worst things you see around construction projects is for young home buyers to lose their money, as my colleague pointed out in a previous question. Probably one of the other terrible things you see is when subbies do a lot of work on a project and then find that they are not being paid because of the insolvency of the prime contractor or some other defect in the contractual arrangements.
Up to the present time, we have been bound by the Workmen’s Liens Act on such matters; an act that was originally written in about the 1890s in South Australia. We are really using something out of the dark ages. The legislation we are putting through parliament now is to create a certainty of payment and of rights for subcontractors working on these construction projects. It is long overdue.
It is devastating for a small business, such as a subbie, to find that they are hung up, not getting paid for long periods of time. Their business can often be put completely out of existence. The other thing that happens, of course, is that putting a lien on the property that is the subject of the construction also often holds that property bound up for many years when there is a court action in progress.
This legislation will create very clear rights for the subbies. It bans ‘pay until paid’-type clauses in contracts that would allow prime contractors to withhold payments to these subcontractors. It also provides a very simple, straightforward process of adjudication if there is a dispute over the payments under a contract. This is long overdue.
Madam Speaker, we are here supporting our subbies and cleaning up the construction industry so that we have a really good industry that can grow in the Territory with our economy.
Last updated: 09 Aug 2016