Roadmap for smooth transition to new subcontractor protections

  • Three-stage action plan to implement Security of Payment reform package  
  • Industry education and support to help businesses adapt to changes  
  • New laws to commence from August 1 2022
  • The McGowan Government has today released an action plan for implementing landmark Security of Payment reforms to improve protections for subcontractors across the building and construction sector.

    The Building and Construction Industry (Security of Payment) Act 2021 passed through Parliament in June this year and is due to take effect from August 1 2022.

    Reforms included in the Act include speeding up payment times on construction projects, providing a more robust rapid dispute resolution process and improved protection of subcontractor retention money in the event of an upstream insolvency.

    The Building Services Board will also have powers to take action against builders who do not pay debts and those with a history of financial issues.

    Education initiatives to help the industry adapt to the changes are a key part of the implementation action plan, which involves three stages that correspond with particular reforms coming into effect.

    The first stage begins in August 2022 with the new Security of Payment laws. In February 2023, stage two will focus on the first phase of a retention trust scheme and new regulatory powers, followed by stage three in February 2024 with further progress on retention funds and fairer contracting practices. 

    The Action Plan for Reform: Better Payment Protections for Contractors in the WA Building and Construction Industry is available on the Building and Energy website at, https://www.commerce.wa.gov.au/publications/security-payment-action-plan

    Supporting regulations will be released for public comment in due course.

    As stated by Commerce Minister Amber-Jade Sanderson:

    “These new laws provide better payment protections for all contractors working in WA’s building and construction industry, protecting their right to payment.

    “The McGowan Government recognises businesses will need time to adapt to the changes and is providing comprehensive education and support measures and a three-stage rollout to aid this transition.

    “This action plan provides a clear direction and incorporates feedback from consultations with peak industry associations and several State Government agencies.”

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