THE collapse of Armidale construction company BuildPlan has helped pave the way for new laws that will help protect builders and subcontractors.
The Building and Construction Industry Security of Payment Act 1999 was amended last week to ensure prompt payments for subcontractors.
Member for Northern Tablelands Adam Marshall welcomed the new laws.
“This is the first step in a number of necessary reforms to reduce the unacceptably high level of business insolvencies in NSW,” he said.
“The recent Collins Inquiry highlighted that when payments are withheld or delayed, subcontractors face serious financial hardship.
“We saw this first-hand in the region with the BuildPlan group earlier this year, which saw a number of subcontractors left high and dry and critical building projects significantly delayed.”
Mr Marshall said the new laws would introduce prompt payment provisions that would ensure subcontractors were paid within a reasonable time.
“Head contractors will be required to pay subcontractors within 30 days, rather than long payment cycles of 45 to 60 days and on occasion, up to 120 days,” he said.
“The prompt payment provisions will extend throughout the entire contracting chain, from principals who will be required to pay head contractors within 15 business days of receiving a payment claim, through to small subcontracting businesses.
“Head contractors will also be required to provide written statements to principals, stating that all subcontractors have been paid before they receive payment.”
