12/06/2017 - 10:42

New subcontractor body calls for payment change

12/06/2017 - 10:42

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A new body for local subcontractors is calling for participation in a survey to help reshape the payment process in the industry.

A new body for local subcontractors is calling for participation in a survey to help reshape the payment process in the industry.

Subcontractors WA has asked subcontractors around the state to register with the organisation and participate in its government survey, which will ask about invoicing practices, payment terms, reasons for late payment and involvement in payment claims.

Subcontractors WA chair Louise Stewart said non-payment was a major issue for subcontractors in Western Australia and there was an urgent need to create a clear, simple and fair process to protect the payment of subcontractors in the building and construction industry.

“The project-based nature of the construction industry can create difficulties for subcontracted individuals and firms to manage cash flow and maintain labour and equipment,” she said.

“Defaults or delays by the head contractor in making payments then have serious consequences for those awaiting payment for work done or goods and services supplied.”

Ms Stewart, who is also managing director of O’Connor-based business management consultancy Performance Contracting Group, said payment for contracted work should be made through project bank accounts or similar mechanisms that secured money owed to subcontractors, and ensured the release of funds payable directly to the subcontractors and builders simultaneously.

“It should not be acceptable for head contractors to use money owed to subcontractors to fund their projects rather than have the appropriate level of working capital in their businesses,” she said.

“Only the introduction of project bank accounts or similar payment platforms will force this entrenched business model in construction to change.

“The implementation of a secure and equitable system will promote collaborative delivery on projects, remove subcontractor uncertainty, and help all parties focus on the needs of the project.

“Too many subcontractors lose their livelihood, their business, their families and, in some tragic cases, their lives because there are no effective payment laws for subcontractors.”

Ms Stewart said Subcontractors WA was established to provide a voice for those working in the sector, given that builders were well represented by organised industry bodies such as the Master Builders Association.

“Builders do not want the introduction of project bank accounts and the MBA will be making sure builders have their say in the survey,” she said.

“We need to get as many subcontractors as we can completing the government survey to make sure our voices are heard in Canberra and the rights of subcontractors are protected.

‘‘The results could have far reaching implications on security of payment mechanisms for every Western Australian subcontractor for years to come.”

The survey is open until Friday, with a final report to be delivered by the end of the year that will include recommendations to be considered by the government.

Along with Ms Stewart, Subcontractors WA’s board comprises Frogmat boss Terry Delane, Cockburn Electrical Group head Roger Ward, Verlindens Electrical Service leader John McMahon, and Lateral Legal managing director Shane Brown.

Subcontractors WA's website can be found here: www.subcontractorswa.com.au

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