The NSW Government is seeking feedback from the construction industry over a proposed security of payment regulation that will deliver a more secure system of contractor payments across the sector.
NSW Fair Trading Commissioner, Rose Webb, says the regulation will complete the package of reforms that allow for a new payment structure and faster payments for contractors and subcontractors, while also enabling quick and fair dispute resolution.
"These reforms will enhance the level of protection afforded to subcontractors, so they can obtain payment for work completed, or supplied goods or services, while improving national consistency in security of payment legislation," Webb says. "One of the main benefits of the new regulation is to reduce the project value threshold from at least $20 million to at least $10 million for the trust account provisions to kick in.
"It will remove the annual reporting requirements for trust accounts to NSW Fair Trading, but introduce an obligation to provide trust account records to subcontractors if their money is being held in in a trust account. Qualifications and eligibility requirements for adjudicators will also be introduced, which aim to provide greater clarity in determining the suitability of adjudicators undertaking that function, and more consistent outcomes for parties to a dispute."
Once finalised, the Building and Construction Industry Security of Payment Regulation 2020 will commence on 1 September 2020, with a transitional period provided for some reforms.
The regulation will be available for a period of four weeks to allow the public to provide feedback. The Regulatory Impact Statement (RIS), which sets out the rationale and objectives of the proposed regulation, has been prepared to identify and assess direct and indirect costs, benefits and risks of the proposed regulation.
Interested parties will be able to make comment until 5pm Friday 24 July 2020. To access the proposed regulation, accompanying RIS and a draft Continuing Professional Development Guideline for Adjudicators visit www.fairtrading.nsw.gov.au.