Page 3508 - Week 11 - Thursday, 19 September 2013

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Building and Construction Industry (Security of Payment) Act 2009—review

Paper and statement by minister

MR CORBELL (Molonglo—Attorney-General, Minister for Police and Emergency Services, Minister for Workplace Safety and Industrial Relations and Minister for the Environment and Sustainable Development): For the information of members, I present the following paper:

Building and Construction Industry (Security of Payment) Act, pursuant to subsection 45(2)—Report on the outcome of a review of the operation of the Act, dated August 2013.

I ask leave to make a statement in relation to the paper:

Leave granted.

MR CORBELL: I am pleased to table this report of the review of the operation of the Building and Construction Industry Security of Payment Act 2009. I would like to acknowledge the industry stakeholders who contributed to the review of this important piece of legislation and thank them for their ongoing commitment to engage with government in improving the operation of the act.

The review undertaken by my directorate covered the operation of the act over the three years since its commencement in July 2010. The report notes that the act, when used by contracted parties, has proven effective in securing payment for goods and services provided.

The review found that general awareness in the building and construction industry of the act and its functions including claims for payment and adjudication activities, continue to increase. It was acknowledged, however, that many providers of goods and services continue to rely on traditional construction industry dispute resolution methods.

The policy intent of the act was not to replace the more traditional methods of dispute resolution. Rather, it was to provide a simple, more cost-effective means of responding to disputes between contractors.

The report noted that while it was not expected that adjudication processes under the act would replace all other forms of dispute resolution, there were a number of likely factors that impacted on the act’s overall impact. These included:

the relatively short period of time that the act has been in operation;

the lack of willingness of subcontractors to force payment by using coercive mechanisms; and

the small market size limiting diversity of business relationships particularly in the residential construction sector.

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