Broad support for reform of subcontractor sector

The Legislative Assembly Environment and Planning Committee examined payment practices in the construction industry, strengthening the statutory right to claim payment, improving the adjudication of payment disputes and insolvency in the construction sector.

“ ‘The Government has carefully considered the report’s nine factual findings and 28 recommendations for reform.' ”

Government response, October 2024

It supports 16 recommendations in full and the other 12 in principle or in part.

‘Many of the recommendations propose to repeal provisions added to the SOP Act in 2006,’ the response said.

‘Most other recommendations propose changes to the SOP Act that modernise aspects of its operation, bring it into closer alignment with other states’ and territories’ security of payment (SOP) legislation, or propose broader issues for further consideration by the government.’

Recommendations to broaden the types of payments subcontractors can claim and extend the time for which they can claim payments for their work have been accepted.

‘Victoria is unique among Australian jurisdictions in having the shortest time frame – three months – for bringing a payment claim under the SOP Act; other states and territories allow payment claims to be made either within six months or twelve months,’ the response noted.

The Committee received 44 public submissions, including from building practitioners, construction-related suppliers and consultants, trade associations, legal practitioners, authorised nominating authorities (ANAs), adjudicators, and academics.

There were also two days of public hearings, involving evidence from 10 witnesses, including the Department of Transport and Planning and the Victorian Building Authority.

You can read the full government response and Committee’s report on the inquiry website.