Ban for builders who left subbies high and dry

The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, has commended the one month ban on a Victorian building company to tender for any government-funded projects after it failed to pay a subcontractor for completed work.

“This action, the first exclusion sanction imposed by the government, is a great first step in ensuring small business subcontractors get paid fairly for their work,” Ms Carnell said. “Taxpayers’ hard-earned dollars should not be used to pay building companies that do not pay their subcontractors on time.”

Last year the government committed to paying prime contractors within 20 days, with a requirement they pay their subbies on the same terms and the ASBFEO is keen on enforcing this policy.

“We want to see significantly longer bans on building companies that continue to offend; up to three years or permanent exclusion from all government contract work in serious cases,” Ms Carnell said. “We also encourage state and territory governments to take the same approach.”

The ASBFEO has noted that many large construction companies have a track record of poor payment practices and the exclusion sanction will go some way to level the playing field between subbies and the companies they work for.

“Building companies working on government contracts are on notice! If you don’t pay your subcontractors on time, you will be excluded from tendering for government work,” Ms Carnell stressed.

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    Cheryl Edmunds

    April 15, 2019 at 14:59

    This scenario is not just the case with the typical trade subbie. This scenario also applies to the qualified contractors who provide administrative and accounting support for the construction industry. As a subbie Accountant/Administrator, I have no protection of the Security of Payment Act. The construction company can contract me to complete all SWMS and compliance documentation and reporting and not pay me and there is nothing I can do.
    The legislation that protects the typical subbie needs to be reviewed and revised so all professions contracting to the construction industry have some form of protection from those companies who have unethical trading practices. The current wording of this legislation is no longer entirely correct in this day and age.

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