Subbies pay reform crucial

Monday, 08 May, 2017

Electrical industry body NECA (National Electrical and Communications Association) has created a detailed submission to the federal government’s review of security of payments laws in the building and construction sector. The review seeks to address the significant differences in approach to present laws across Australia’s states and territories that impact on protections for subcontractors.

“As a finishing trade, electrical contractors are often the last in the line of credit to receive payment for work completed in the event of a construction company collapse, yet arguably provide the highest value inputs of all subcontractors by way of fixtures, fittings and labour,” said NECA Chief Executive Officer Suresh Manickam.

“We have called for the harmonisation of the creditor line process across Australia for many years, so that our electrical contractors are not disadvantaged from the collapse of a construction company. Our members are typically small and medium-sized electrical contractors who are particularly susceptible to cash flow issues,” said Manickam. Harmonisation is expected to reduce administrative and compliance costs imposed on businesses.

NECA’s submission to the review highlights the following priorities:

  • Appropriate time frames to ensure timely outcomes such as a default payment period of 10 business days.
  • The establishment of Payment Withholding Requests and Retention Money Trust Accounts across all states and territories.
  • Allowing a final chance to make a claim following a contract’s termination.
  • Enhancing the ability of subcontractors to claim retention monies — by extending the time limit beyond the normal limitation period to 12 months.

“NECA also believes that appropriate penalties and enforcement are also essential to address the present, widespread practice of subcontractor intimidation to deter them from exercising their rights under existing Security of Payments laws.”

NECA’s submission to the review can be found here.

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