The NSW Government is seeking feedback from the construction industry over a proposed security of payment regulation which will deliver a more secure system of contractor payments across the sector.
NSW Fair Trading Commissioner, Rose Webb, said the regulation will complete the package of reforms that allow for a new payment structure, faster payments for contractors and subcontractors and enable quick and fair dispute resolution.
“These reforms will enhance the level of protection afforded to subcontractors so they can obtain payment for work completed, or supplied goods or services, while improving national consistency in security of payment legislation,” Ms Webb said.
“One of the main benefits of the new regulation is to reduce the project value threshold from at least $20 million to at least $10 million for the trust account provisions to kick in.
“It will remove the annual reporting requirements for trust accounts to NSW Fair Trading but introduce an obligation to provide trust account records to subcontractors if their money is being held in in a trust account.
“Qualifications and eligibility requirements for adjudicators will also be introduced which aim to provide greater clarity in determining the suitability of adjudicators undertaking that function, and more consistent outcomes for parties to a dispute” Ms Webb said.
Once finalised, the Building and Construction Industry Security of Payment Regulation 2020 will commence on 1 September 2020, with a transitional period provided for some reforms.
The regulation will be available for a period of four weeks to allow the public to provide feedback. The Regulatory Impact Statement (RIS), which sets out the rationale and objectives of the proposed regulation, has been prepared to identify and assess direct and indirect costs, benefits and risks of the proposed regulation.