National Review of Security of Payment Legislation

Corporate Finance & Restructuring

June 23, 2017

construction

Each State in Australia has Security of Payment legislation which provides protection to contractors in the construction industry by ensuring they have adequate avenues to recover payment owed for works performed. Unlike other States, Western Australia’s Security of Payment legislation affords protection to not only contractors but Principals as well, allowing claims to be made up and down the supply chain.

The level of protection and approach to Security of Payment legislation varies significantly across Australia and so in December 2016 the Federal Government announced a much needed review of the legislation to align existing Security of Payment legislation nationally.

The review is focused on:

  • Evaluating existing state-based legislation to identify best practice;
  • Consulting with stakeholders, including the Security of Payments Working Group (SPWG) which was established in 2016 by virtue of the Building and Construction Industry (Improving Productivity) Act. The SPWG was established to monitor the impact of Commission activities on the compliance of those in the building industry and make recommendations to the Australian Building Construction Commission about policies, procedures or programs that could be implemented to improve compliance;
  • Contractual terms which hinder contractors obtaining payment;
  • Assessing previously developed models for Security of Payment other than those currently in place.

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