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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2011-06-08 Daily Xml
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BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT ACT

Adjourned debate on motion of Hon. T.A. Franks:

That this council condemns the government for its failure to—

1. Act in a timely and appropriate manner to proclaim legislation passed over 15 months ago, namely the Building and Construction Industry Security of Payment Act 2009;

2. Allocate responsibility for this legislation to a particular minister;

3. Acknowledge the hardship and human consequences that its failure to act has created, including protracted and expensive litigation undertaken to recover monies owed that would not have been necessary had this legislation been active; and

4. Provide this council with details of—

(a) which government department will be responsible for administering the act and its regulation;

(b) when the industry will be able to access information and details, including a public point of contact within government to obtain further information when, and if, this becomes available; and

(c) how the government intends to urgently inform the industry in regards to this end; and

(d) when the people in the industry who have been seeking answers from the Premier and Attorney-General's office will actually get a response to their correspondence.

(Continued from 9 March 2011.)

The Hon. J.M.A. LENSINK (17:35): I rise to indicate support for this motion, which I think is a complete no-brainer. The background to it is that South Australia was the last state to actually implement this type of legislation. In 2009, the Liberal Party supported the Building and Construction Industry Security of Payment Bill, which was then passed in December of that year. A similar bill was introduced by Nick Xenophon in 2006 and subsequently by John Darley. There were some minor differences between them.

This bill was passed in December 2009 and has yet to be proclaimed. Questions have been asked by various members about where it is, and the minister stated in response in this place on 23 February that 'the intention is to have the new system in place by the end of this year as the legislation I believe requires.' Liberal Party members and members from other parties have been contacted by trader subcontractors who have finished work, not been paid and now find themselves in considerable financial stress.

Their ability to pursue debtors through civil remedy is costly and limited, and I will refer to a case that I have been advocating on behalf of in a moment. One constituent has contacted us to say that he has some $81,000 worth of funds outstanding from general contractors. I have also recently met with industry groups who are very keen to have the bill proclaimed posthaste, as their members are suffering without any protection.

I am not sure what the government's intention is, as the minister made those comments I have read, but I take it from those comments that the government intends to wait until section 7(5) of the Acts Interpretation Act will require the act to commence on the second anniversary of the date on which it was assented to. I would be disturbed if that was the case. When I met with industry groups, I think they were very concerned that the measures are not being put in place, there is a very short-term line in terms of consultation, and really the government does need to make sure that it has something implemented as soon as possible.

I guess the government could say that hindsight is a wonderful thing, but it really should have got on to it as soon as possible. Indeed, I did write to the minister on behalf of a constituent in December last year, asking him about the security of payment legislation. The minister stated in her reply on 14 December that the matter falls within the portfolio responsibility of the Hon. Tom Koutsantonis as the Minister for Industry and Trade. Part of the problem has been that the government has been shoving this around between various departments for who knows what reason, possibly because it was not actually a bill that was promulgated from within its own bureaucracy.

This particular constituent, who is a tiler, wrote an open letter to SafeWork SA, someone that he calls the 'Phantom Ombudsman' and a 'comrade Rann'. In relation to this particular bill he says:

Now take the security of subcontractor payments.

First meeting was in Adelaide 1996. Where are we now—nowhere! The Security of Subcontractor payments has been passed in Parliament last year. Comrade Rann doesn't even know who is looking after it, one week it is Rau Attorney General then its Miss Gago Minister of Consumer Affairs, speak to her staff—answer: no where not looking after it.

I think the only person who really knows who is looking after it is God.

Then he says:

…my suggestion is that you give the Security of Subcontractor payments a miss—throw it in the bin. Let the builders continue with what they are doing and especially the amounts that are taken away of $200 and $300 from the sub-contractors when they submit their invoice for payment. What happens usually is the sub-contractor puts a line through the amount outstanding and writes it off. Do you know why? You engage a solicitor that costs between $200-$300. You then issue a Summons another $120.00 plus $30.00 to serve it plus $15.00 for expenses. So what are you up for? More than what is owed. Then you have to attend Court for a hearing. You lose half a day. A trial date is then set and then the Magistrate works to the Law. You might find that he thinks or a building consultant thinks that the work should have only taken one hour so one hour take travelling you are awarded maybe $90-$100. Now what has your cost been? Almost $1000.00. It's just rubbish and that is all that it is.

In NSW they have been able to recuperate $10.4 million in four years. What have we recuperated in South Australia? Oops wrong word—lost in South Australia most probably only $2 million. But does our Government taken any actions—No.

This particular chap also wrote to the Attorney-General on 9 June last year, so if that did not stir anything up about this bill needing to be given some attention then I do not know what will. He wrote:

Dear Sir….

In regards to the above subject [that being security of sub-contractor payments] do you think it will come into force this year? Or will it take another 13 years to come into force?

I have written to the Liberals, I have written to your predecessor who has finally submitted a Bill which is being scrutinized by people who have no idea whatsoever on how the system works. They all think it's a joke but millions of dollars are lost every year on wages from the average sub-contractor who has been diddled out of money that he is entitled to.

I give you an example. S.J. Weir diddled me out of $186,000. Legal profession wants $55,0000 up front to fight the case. The legal system itself is rubbish. Most of them wouldn't know the difference between [expletive] and clay.

Very clearly, and for good reason, a very angry constituent. We did seek to ensure that that legislation was actually being progressed, and now it is not. Therefore, I strongly support the motion of the Hon. Tammy Franks and urge the government to ensure that it gets on with it and implements this for the protection of the good tradespeople of South Australia.

The Hon. CARMEL ZOLLO (17:43): I rise on behalf of the government to make some comments in relation to this motion. The Building and Construction Industry Security of Payments Act is a new law that will provide businesses in the construction industry with the right to claim progress payments as work proceeds. It also sets out a process for businesses to recover progress payments and provides for payment disputes to be referred to an adjudicator. The Minister for Consumer Affairs, through the Office of Consumer and Business Affairs, will be responsible for the administration of the new law.

As indicated by the Minister for Consumer Affairs in parliament on 23 February, in response to a question without notice from the Hon. John Darley, the Office of Consumer and Business Affairs is currently working with a number of government agencies to progress the security of payments legislation in a timely fashion. In fact, the minister has been advised that drafting of regulations has commenced and is progressing well. The new law must commence on or before 10 December this year. This legislation is an important progression for the industry and is a large undertaking that will establish in South Australia a brand-new system for resolving disputes.

The Hon. T.A. FRANKS (17:44): I thank those members who have made contributions, the Hon. Michelle Lensink and the Hon. Carmel Zollo. I also acknowledge the extensive work done by the office of the Hon. John Darley and, in particular, his staff member Connie Bonaros, on this matter.

The simple fact is that we have been waiting for a very long time for this act to be facilitated by this government. We are going to see it come in at the last possible time that it probably could. In the meantime, we have seen contractors and subcontractors not paid for major government projects, such as the Adelaide Aquatic Centre, the Adelaide Oval redevelopment and the desalination plant.

I look forward to the fact that those who will work on the Royal Adelaide Hospital will have the protections offered by this new act and I would hope that in the future the government will not be quite so tardy to allocate ministerial responsibility and set the wheels in motion when it comes to implementing what was a very good piece of legislation, originally initiated by the Hon. Nick Xenophon and carried out by the Hon. John Darley. With that, I commend the motion to the council.

Motion carried.

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