Nick Xenophon (SA, Nick Xenophon Team) Share this | Hansard source

by leave—I move Nick Xenophon Team amendments (1) and (2) on sheet 8010 together:

(1) Clause 5, page 12 (after line 29), after the definition of WHS Accreditation Scheme, insert:

Working Group means the Security of Payments Working Group established by section 32A.

[Security of Payments Working Group]

(2) Page 28 (after line 9), at the end of Chapter 2, add:

Part 4—Security of Payments Working Group

32A Security of Payments Working Group

(1) The Security of Payments Working Group is established by this section.

(2) The functions of the Working Group are the following:

(a) monitoring the impact of the activities of the Commission on the conduct and practices of building industry participants in relation to their compliance with laws (security of payment laws) of the Commonwealth, the States and the Territories that relate to the security of payments that are due to persons in relation to building work;

(b) making recommendations to the ABC Commissioner about policies, procedures or programs that could be implemented to improve compliance by building industry participants with security of payment laws;

(c) making recommendations to the Minister about any matter that the Minister requests the Working Group to consider;

(d) any other functions conferred on the Working Group by the rules.

(2) The resignation takes effect on the day it is received by the Minister or, if a later day is specified in the resignation, on that later day.

32G Termination of appointment

The Minister may terminate the appointment of a member of the Working Group appointed by the Minister:

(a) for misbehavior; or

(b) if the member is unable to perform the duties of his or her office because of physical or mental incapacity; or

(c) if the member:

  (i) becomes bankrupt; or

  (ii) takes steps to take the benefit of any law for the relief of bankrupt or insolvent debtors; or

  (iii) compounds with one or more of his or her creditors; or

  (iv) makes an assignment of his or her remuneration for the benefit of one or more of his or her creditors; or

(d) if the member is absent, except on leave of absence, for 14 consecutive days or for 28 days in any 12 months.

32H Other terms and conditions

A member of the Working Group appointed by the Minister holds office on the terms and conditions (if any) in relation to matters not covered by this Act that are determined by the Minister.

32J Meetings

(1) The Chair must convene:

(a) such meetings of the Working Group as are, in his or her opinion, necessary for the performance of its functions; and

(b) at least 4 meetings of the Working Group in each financial year.

(2) The procedures to be followed at a meeting of the Working Group are to be determined by the Chair.

32K Annual report

The Chair must, as soon as practicable after the end of each financial year, prepare and give to the Minister, for presentation to the Parliament, a report on:

(a) the membership of the Working Group during the financial year; and

(b) the operations of the Working Group during the financial year.

[Security of Payments Working Group]

The issue of security of payments has been a vexed one and seemingly insoluble for many years. Back in 2004, at the time when the Cole royal commission findings were handed down, Commissioner Cole recommended we have a national scheme to deal with security of payments and that the current system in place of security of payments was woefully inadequate.

The report that was done by the Senate economics references committee into insolvency in the Australian construction industry, headed I just want to be paid, was tabled in December 2015. Senator Cameron is to be commended for playing the key leading role in driving that report. That report found a litany of failures across the country when it comes to security of payments legislation. It is done on an ad hoc basis. It is done on a state-by-state basis with varying schemes and complexities. In some cases it works, but in many cases it does not. One example of where it did not work was as a result of the Newman government in 2014 amending, in a very retrograde way, the security of payments laws—they were working quite well—as a result of pressure, I believe, from the big end of town to make it much more difficult for subcontractors to be paid.

This amendment establishes a process. I know that some will say, 'Well, it's just a process.' There are constitutional issues as to whether we can actually amend this at a federal level, but what we can do is drive the reform with a security of payments working group, which is designed to complement the new section 11 of the Building Code. The group will be made of employee, employer and contractor representatives and is required to meet at least four times a year. The group will monitor the impact the ABCC has on the conduct and practices of building industry participants in relation to security of payments legislation. A requirement to comply with security of payments legislation is not a new feature of the Building Code; however, the ABCC—or the FWBC in the past—has not undertaken any serious compliance work to ensure contractors are complying with their obligations.

As I mentioned previously, this amendment works in tandem with the new section 11D of the Building Code. It creates a new clause that strengthens the requirement for code-covered entities to comply with security of payments legislation. While the amendment could be criticised in that it repeats what is already contained in various state and territory security of payments legislation, the laws that the ABCC will be tasked with undertaking include compliance activities to ensure contractors are complying with their security of payment obligations. If, for example, during a building code audit an ABCC investigator is told by a subcontractor that they are having difficulty obtaining a progress payment from a contractor, formal compliance activity can be undertaken, together with other amendments that I am moving to ensure impartiality—to ensure that the work of the ABCC must be carried out in an impartial and effective manner which lends itself to administrative law remedies—that will give it more teeth.

This addition to the building code, together with the establishment of a security of payments working group, is designed to effect cultural and attitudinal change in the industry in relation to security of payments. Contractors will take security of payments much more seriously once they realise that not complying with security of payments legislation may result in an exclusion sanction. I would like to indicate again that the work that Senator Cameron did—and I was part of that committee; I attended a number of hearings—on insolvency in the Australian construction industry, which brought into issue security of payments legislation, was pretty fundamental work. I commend it to anyone on any side of politics to read this report for its substance, for the evidence that was given and for the conclusions that were reached.

I want to advance this. We have had this since 2004; the Cole royal commission said we had to get on with security of payments laws. Nothing substantive has been done in relation to this. I see this as a very useful and significant step forward to make an actual difference to security of payments laws. Senator Cameron, whatever differences we have, I think we are on a unity ticket when it comes to making sure that we have strong security of payments laws in this country. I would like to hear the minister's attitude to this amendment and on practical measures to resource this working group—to go through a process where we can have some real substance to advance this at a national level.