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5 February 2020
The government introduced the next phase of its controversial Building Industry Fairness legislation today, making the bold promise of a new era for tradies.
Uncomfortable truth: new era for builders and tradies
While Master Builders welcomes the government's in principle acknowledgement and commitment to addressing problems across the entire contractual chain, in particular the issue of non-payment by developers and holding these parties to account; we still have significant concerns that the changes being introduced don’t do enough to address this problem.
The legislation introduced today includes some positive changes that we’ve worked constructively with government to achieve; however, by and large, it still translates into extra costs for builders and tradies, with no real benefit in return, and in some instances, the changes are detrimental to many builders and trade contractors (particularly in the latter phases).
On behalf of members and industry we worked hard to refine the BIF legislation, particularly chapters relating to Project Bank Accounts (PBAs) (to be called Statutory Trust Accounts) and progress payments. There is no doubt that some of the government’s proposed changes to BIF improve on the current regime and will make life easier for builders and subcontractors.
However, while the level of red tape has been reduced, we continue to have reservations about the regime overall, as there is still no evidence that PBAs have played any part in ensuring that the more than 1,000 subbies involved in the 100 PBA projects (to date) were paid in full, on time, every time, which is what they are intended to do. What we do know from the Independent Panel’s report is that PBAs and the changes to progress payments have cost the principals, builders and the subcontractors involved.
Our recently released outlook 2020 and the latest building approvals have confirmed 2020 will be another tough year for the building industry. In our view the government hasn’t given enough consideration to this grim outlook when introducing the next phases of this legislation.
Don’t miss your place in our next BIF Chapter 3 workshops where you’ll learn more about payment claims and schedules and how to get your business ready.
Watch this space – more info to come to assist members to get ready for the changes once the legislation is passed. Contact us if you need assistance.