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Peak building and construction industry association Master Builders Australia says that the Federal Government’s response to the Murray Review is a step in the right direction towards improving payment practices within the building and construction industry.
Building and construction is home to over 260,000 independent contractors and self-employed tradies, supported by over 450,000 businesses, of which almost 99 per cent are small and medium enterprises.
High standards of commercial conduct are crucial to ensuring that parties within the industry get paid on time and in full.
Master Builders Australia CEO Denita Wawn said: “The Government’s acknowledgment that it has a stewardship role to address issues arising from state and territory regulation is an important recognition of the need to reduce inconsistencies between jurisdictions and restore their focus back to their original intent”
Boosting funding for ASIC to identify and take more effective enforcement through better usages of the Director Identification Number scheme (DIN) is long overdue and welcomed.
Ms Wawn added “The director identification number is an effort to reduce the incidence of phoenix activity and other types of capricious commercial conduct that undermines and hurts the majority of businesses who do the right thing.
“Master Builders has long supported a DIN as a way to help government agencies and regulators enforce existing laws far more effectively while avoiding the need for higher levels of red tape and regulation.
“Unfortunately, the introduction of the DIN has not worked as effectively as the industry would’ve liked to see.
“The additional funding for ASIC to implement and prioritise high risk individuals is a good first step. We would like to see this effort extended, to connect with other departments including the ATO to identify potential phoenixing activity earlier.”
The Federal Government also announced a range of other measures upon which it has committed to further consultation.
“Master Builders is reviewing the detail of these changes and will consult with government so there are no unintended consequences and additional cost/regulatory burdens.”
“It’s essential to focus on preventing issues before they arise rather than dealing with the consequences when it’s too late.” Ms Wawn concluded.
Master Builders has been advocating for additional measures including:
- A stable economy and increased productivity: We need to get housing inflation under control, which requires a focus on the supply side of the economy and a meaningful push to boost industry productivity which has been falling like many areas in the economy.
- Addressing inefficient and unnecessary business costs: Reducing burdensome regulations and ensuring laws operate effectively and consistently is essential to relieving businesses of cost and compliance pressures. State and territory security of payment laws need to be streamlined. Master Builders has long supported greater uniformity and simplicity in security of payment regimes based on principles such as prompt payment rights, a rapid adjudication process, and a simple, informal, and flexible approach.
- Establishing a fairer approach to risk:We need a better approach to the level of risk involved in construction so that it is shared more fairly by everyone in the chain and not just loaded up onto the builder.
- Enhanced enforcement of existing laws: It is crucial to enforce existing laws more effectively, condemning those who break them and ensuring rogue operators face the full force of the law.
- Building business resilience and education: Businesses, particularly small businesses, should be supported to develop resilience and operate sustainably and financially. Strengthening businesses’ skills benefits both the industry and the wider community.
Media contact: Dee Zegarac, National Director, Media & Public Affairs
0400 493 071 | dee.zegarac@masterbuilders.com.au