BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT BILL

Introduction and First Reading

The Hon. J.A. DARLEY (16:13): Obtained leave and introduced a bill for an act to provide for entitlements to progress payments for persons who carry out construction work or who supply related goods and services under construction contracts; and to make a related amendment to the Commercial Arbitration and Industrial Referral Agreements Act 1986. Read a first time.

Second Reading

The Hon. J.A. DARLEY (16:14): I move:

That this bill be now read a second time.

The bill was first introduced into this place by my predecessor, the Hon. Nick Xenophon, on 12 September 2007. I do not wish at this time to restate in full the contribution he made which outlines the history of the affected industry's efforts in lobbying governments for legislation of this type, stretching back over some 20 years, the different legislative regimes that apply in other Australian jurisdictions, as well as the real need for a system to secure payments to subcontractors and builders in a range of building industries.

I do want to put on the record, however, that since coming to this place I have met with the relevant stakeholders in the building and construction industry: representatives from the National Electrical and Communications Association; Air Conditioning and Mechanical Contractors Association; the Association of Wall and Ceiling Industries of South Australia; and the Plumbing Industry Association of South Australia, representing some 12,200 people working in the South Australian construction industry. They have outlined the ongoing hardship and disadvantage experienced by subcontractors who simply do not have the resources to enforce debts in the event of a subcontractor's defaulting on their payments.

The building and construction industry is made up of various consultants, contractors, subcontractors and suppliers, all of whom work together to deliver buildings and infrastructure. This mutual dependence and cooperation make security of payment a critical foundation for the industry. Failure to pay at any link in the contract chain can be crippling to subcontractors and suppliers who are waiting to be paid for their work.

The bill mandates good payment practices within the building and construction industry by applying fair and reasonable payment terms into contracts that are not in writing and providing an effective and rapid adjudication process for payment disputes. The bill establishes a procedure for this which provides for:

the making of a payment claim by a person claiming payment;

the provision of a payment schedule by the person making payments to indicate the amount they will pay;

the referral of any disputed claim to an adjudicator for a determination;

the payment of the amount of the progress payment determined by an adjudicator; and

the recovery of the progress payment in the event of failure to pay.

I am aware that, to date, South Australia and Tasmania remain the only Australian jurisdictions without legislation of this type. I would like to ensure that South Australia will not be the winner in the race to be last in implementing security of payment legislation. I urge honourable members to support this bill.

Debate adjourned on motion of Hon. I.K. Hunter.