Labor vows subbie safeguards

The West Australian, 2.8.16:

WA Labor is making a pitch for blue-collar voters, with a policy that guarantees subcontractors will be paid for work on government projects and aims to tighten protections on private building schemes.

Revealing the policy today, Opposition Leader Mark McGowan will back calls for public construction contracts to use project bank accounts, to protect funds that subcontractors are owed for their work.

Labor also says it will consider adopting a Queensland scheme that penalises head contractors for non-payment by blocking them from government contracts and then revoking their building licence.

Shadow commerce minister Kate Doust said that, amid a high level of insolvencies in construction and rising payment disputes, Labor wanted to send a clear message that unconscionable behaviour from head contractors would not be tolerated.

She said the policy was a starting point, with details to be resolved if Labor won government in March.

“This is about putting in place mechanisms that would ensure subcontractors get paid for the work they do,” she said. “The Government has had the opportunity to rectify these issues going back to 2012-13 but they haven’t.”

In the past three years, the Barnett Government has pioneered trials of project bank accounts, which involve a client depositing payments into a trust account for subcontractors, rather than relying on a head contractor to pass on payments.

Last month, Treasurer Mike Nahan said project bank accounts would not be included in a planned reform package, but Department of Finance representatives yesterday told subcontractors who lost money in the collapse of the CPD Group in May that the measure was still under consideration.

Master Builders WA has argued that project bank accounts duplicate processes and dramatically increase costs, but subcontractors say they prevent head contractors propping up their businesses with payments that should be passed down the chain.

WA Labor promises to overhaul pre-tender assessments to minimise the risk of head contractors under-quoting.

A Senate committee has recommended project bank accounts be tested on building schemes with more than $10 million in Commonwealth funds.