NECA Welcomes Government Actions to support subcontractors

These measures represent a significant step towards ensuring fair treatment and timely payments for contractors, subcontractors, and suppliers.

However, the success of these initiatives will depend on their effective implementation. NECA expects government departments to enforce these measures within their procurement and contracting processes, and for head contractors to uphold and respect these commitments in practice.

Key Points:

Security of Payments: We note the government is progressing our tripartite work with business and unions on a Building and Construction Industry Blueprint to develop effective arrangements to protect the security of payments for contractors throughout the supply chain. While we would prefer the full adoption of the Murray recommendations immediately NECA will continue in its capacity as a member of the NCIF (National Construction Industry Forum) to influence the blueprint to deliver the protections for subcontractors and ensure they are paid on time and in full. NECA applauds the government leveraging the Commonwealth Supplier Code of Conduct to enforce 20-day maximum payment times and promoting similar expectations for Government Businesses like the NBN, Western Sydney Airport, and Inland Rail. NECA expects all government departments to apply these payment terms rigorously and for head contractors to respect and uphold these obligations in their dealings with subcontractors.

Unfair Trading Practices: The Albanese Government is extending protections against unfair trading practices to small businesses. This move addresses the power imbalances that small businesses face when dealing with larger entities, ensuring they are fairly protected. NECA urges government agencies to proactively embed these protections in procurement policies and expects head contractors to comply without exception.

Boosting ASIC Funding: Additional funding for the Australian Securities and Investments Commission (ASIC) will enhance its ability to identify and take enforcement action against illegal phoenixing conduct, particularly in the construction sector. NECA calls on ASIC to prioritise enforcement in the industry and for government and head contractors to ensure their supply chains remain free of such unlawful practices.

Government's Response to the Murray Review: The government is reaffirming its commitment to the recommendations of the Murray Review on Security of Payment Laws. This includes progressing work on a Building and Construction Industry Blueprint to protect the security of payments for subcontractors. NECA expects all relevant government departments to actively implement these recommendations and ensure compliance from head contractors. As a member of the NCIF NECA will monitor this closely.

Consultation on Unfair Trading Practices: Treasury will consult on the design of protections for small businesses, considering whether a principles-based prohibition should apply and targeting specific unfair trading practices. NECA looks forward to working with Treasury to ensure meaningful protections are established and expects both government entities and private sector contractors to fully adhere to these standards.

NECA's Role: NECA has been actively advocating for these changes and is proud to see the government take meaningful steps to support the construction industry. However, commitments must translate into action. We urge all government departments to implement these reforms within their projects and procurement frameworks and expect head contractors to comply with their obligations in full.

Quotes:

"The government's commitment to addressing unfair trading practices and enhancing the security of payments is a significant step forward. NECA has been advocating for these changes, and are proud to see our efforts come to fruition. However, these commitments must not remain just policy announcements—government departments must implement them, and head contractors must respect them." – Oliver Judd, NECA CEO

"We thank the Albanese Labor Government for working closely with NECA and the Australian Subcontractors Alliance to address these critical issues. This collaboration is a testament to what can be achieved when we work together towards a common goal. Now, we call on all government agencies and major contractors to follow through and ensure these reforms deliver real change on the ground." – Oliver Judd, NECA CEO

"Senator Pocock’s support and advocacy for Subcontractors being treated fairly has been critical to get us to where we are today. His commitment to subcontractors has been unwavering and we look forward to continue working with the Senator and his office to ensure these commitments make a real difference and a fairer system is provided by the government." – Oliver Judd, NECA CEO

"The Murray’s review is the blueprint to delivering equity for subcontractors. Mr Murray’s knowledge and passion for our sector has ensured these important matters have remained current. NECA will continue to fight to have these recommendations implemented in full. " – Oliver Judd, NECA CEO