Senator David Pocock calls on the federal government to strengthen security of payment laws

PBS Building, which operates in the ACT, NSW and Queensland, went into administration last week owing $25 million to 1000 creditors, including many local small businesses and subcontractors.

Canberra business owner Jonathon Davis last week told The Canberra Times he was owed $300,000 for work already completed on a PBS Building job site, while there are reports of some businesses being owed up to $1 million.

Mr Pocock said nationally consistent security of payments laws would help to ensure "tradies get paid for work that they have already completed".

"We had the Murray review in 2017 putting forward recommendations of how we deal with this, and we've seen no action from the ACT government or the federal government, it's not good enough," he said.

"We have to act on this now to protect tradies who have done work. They deserve to be paid for that work."

The Review of Security of Payment Laws, published by John Murray in 2017, outlined 86 recommendations for a national approach to security of payment legislation.

While each state and territory has its own security of payment legislation, the report argued the regimes are "unduly complex".

Recommendations included ensuring a person carrying out work under a construction contract is able to make a payment claim for every named month, or more frequently, as well as establishing a deemed statutory trust model to ensure payments are passed down promptly from the head contractor to subcontractors.

National Electrical and Communications Association head of policy Kent Johns said there had been about 1300 construction company liquidations during the current financial year.

Mr Johns said small businesses are at risk of collapse themselves if they are left out of pocket.

"If someone goes into liquidation and you don't get paid as an electrician, it can take you 20 more jobs and make up for that one loss. That's enough to send these guys to the wall," he said.

"It's impacting their mental health. These are small businesses. These aren't large businesses.

"Without security payments for subcontractors this is going to continue and it's going to ruin the industry. The industry needs to be saved."

Zach Smith, incoming national secretary for the Construction, Forestry, Maritime, Mining and Energy Union, echoed the calls, saying the ACT's laws were particularly weak.

"Unfortunately, the ACT has one of the weakest sets of laws in the Federation when it comes to security of payments," he said.

"The Murray review has shown us what needs to happen, which is statutory trust which protects the entitlements and the money that's owed to subcontractors for work that has already been performed."

Mr Pocock also called on the ACT government to deliver on its promise of a developer licensing scheme.

A spokesperson for ACT Sustainable Building and Construction Minister Rebecca Vassarotti last week told The Canberra Times the minister was planning to meet with the union to discuss security of payments and developer regulation.

"She expects to discuss the impacts of PBS Building going into administration and any implications for national and ACT policy settings then," the spokesperson said.

"While there was reform to strengthen security of payments locally in recent years, we are open to looking at ways we can continue to strengthen protections, as part of our ongoing building reform agenda."

We've made it a whole lot easier for you to have your say. Our new comment platform requires only one log-in to access articles and to join the discussion on The Canberra Times website. Find out how to register so you can enjoy civil, friendly and engaging discussions. See our moderation policy here.