Australia gets behind subcontractors over late payment

The Australian Building and Construction Commission (ABCC) yesterday launched a national campaign to help subcontractors fight late payment.

Commissioner Stephen McBurney, a former umpire in the Australian Footbal League, said the issue of late payment or non-payment of subcontractors’ money was widespread and resulted in viable businesses going down and jobs being lost.

Australian Building and Construction Commissioner Stephen McBurney (Australian Chamber of Commerce and Industry)

A 2017 survey commissioned by John Murray AM for his Review of Security of Payment Laws, revealed 72% of Australian subcontractors in the building and construction industry said at least 40% of their invoices were paid late, with one third saying 60% of their invoices were paid late.

The campaign will target contractors with security of payment obligations under the ABCC monitored Code for the Tendering and Performance of Building Work 2016.

The Commissioner will write to more than 1,300 of these contractors and subcontractors who have tendered for Commonwealth-funded building work.

The campaign also aims to educate subcontractors on their rights, how they can report payment disputes and delays, and how the ABCC may be able to help.

Following consultation with the Security of Payments Working Group, which includes union and contractor representatives, the ABCC identified that many contractors delay payments even when there is no dispute over the payment.

The campaign highlights that payments must be timely and non-payment of due and payable claims must be reported to the ABCC.

To help subcontractors, the ABCC, where it can, will seek payment for the subcontractor as voluntary rectification of Code breaches.

Contractors that breach the Code also run the risk of a sanction that excludes them tendering for Commonwealth-funded building work.

"In short, we ask contractors to pay their subcontractors on time and if there are payment delays or disputes to sort these out quickly and reasonably," Mr McBurney said.

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