The Australian Government’s response to the review of security of payment laws is a positive step toward a fairer and more sustainable construction industry but much more needs to be done and quickly.
Welcoming the response, Australian Constructors Association (ACA) CEO Jon Davies said the report acknowledges the industry’s financial challenges and the need for action.
“The government has recognised the points made in our ‘Trust Deficit’ paper that project bank accounts and trusts won’t solve the industry’s liquidity crisis—in fact, they could make it worse,” said Mr Davies.
“The payment chain starts with clients, and the government is the industry’s biggest client. If they truly want to set the standard, they should lead by example and introduce ‘zero day’ or cash positive payment terms —why should industry bankroll government projects?”
ACA is also calling on both state and federal governments to act as model clients by reimbursing contractors for legitimately incurred additional costs caused by unforeseen global events, such as the COVID-19 pandemic and the war in Ukraine that are still being experienced today.
“The industry hasn’t just had to deal with global shocks—domestic policies like the government’s Same Job, Same Pay industrial relations reforms and the Australian Taxation Office’s aggressive pursuit of tax debt are making the insolvency crisis in the construction industry even worse,” said Mr Davies
“If we want a truly sustainable industry that can deliver the infrastructure Australia needs, we must go beyond payment reform and fundamentally change how the industry operates.
“The development of an industry blueprint by the National Construction Industry Forum is a promising start.”
About us:
The Australian Constructors Association is the only representative body for contractors delivering vertical and horizontal construction projects, as well as undertaking infrastructure asset management. Our members construct and service the majority of major infrastructure projects built in Australia every year. Our goal is to create a more sustainable construction industry.
Contact details:
Megan Anderson, Head of Media and Communications
ph: 0475 978 478 / e: megan.anderson@constructors.com.au
