Page 5377 - Week 14 - Thursday, 19 November 2009
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Equality before the law is a basic principle of democracy, one that has been sacrificed for base political expediency. Abolishing the coercive powers of the ABCC and Fair Work Australia is a step that Australia must take to restore one law for all.
Without asking for an amendment to the bill, we would ask ACT Labor and ACT Liberals to take a stand on principle and insist that their federal counterparts commit to fairer practices in the construction industry for everyone. If we are to ensure best practice in securing prompt payment, as this bill does, we should ensure fairest practice in the industry for clients, contractors, employees and unions alike as well. We welcome this bill as a step forward in ensuring that all participants in the building and construction industry are treated fairly, that disputes are resolved quickly and correctly, and that fewer jobs are lost as a result of payment issues.
MS GALLAGHER (Molonglo—Deputy Chief Minister, Treasurer, Minister for Health and Minister for Industrial Relations) (5.53): I thank members for their contributions and their support for this legislation. Security of payment problems have a number of causes. The two main security of payment issues are slow or disputed payment and insolvency of someone in the contracting chain. Whilst there are limited statistics available dealing with insolvency and bankruptcy in the building and construction industry, there is strong anecdotal evidence of the types of problems and the reasons for them. Major studies in the building and construction industry have concluded that failure to pay subcontractors money due to them has a substantial impact on their capacity to operate as small to medium business enterprises and on the security of their employees.
Relatively low capital backing and heavy reliance on cash flows to sustain business typify the building and construction industry. The structure of the industry is a chain of principals, agents, contractors, subcontractors and suppliers with cascading payment obligations. This structure can multiply the negative effects of partial, non and slow payment by one party in the contracting chain. Resolving payment disputes under the current court system can be very costly for individuals and for the industry as a whole, where legal expenses, time delays and damage to good working relationships may result.
While difficulty in ensuring that subcontractors and others are paid fully and on time is not unique to the building and construction industry, it is often worse than in other industries that generally do not depend to such an extent on subcontracting. The objective, therefore, of establishing security of payments legislation is to facilitate timely payments between the parties to a construction contract and provide for the rapid resolution of payment disputes when they arise.
Rapid adjudication systems established in other jurisdictions appear to have worked effectively and significantly reduced instances of spurious claims and unfairly withheld payments. Evidence in the UK and in New South Wales indicates that a security of payment system can be cost neutral to government and to industry. In the UK, expensive involvement of the legal profession in building and construction industry disputes has decreased, while more fruitful and cost-effective mediation has increased.
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