Who Decides If the Builder Gets Paid?
The article argues that Australia's residential construction payment system produces poor outcomes not because of bad actors, but due to flawed structural design. Reform should target the system architecture, not individual participants.
Who decides when a builder gets paid on a residential construction job?
Builders and subcontractors across all trades are affected by progress payment disputes. A structural fix could mean faster, fairer payments on residential jobs.
Key takeaways
- Australia's residential construction payment system is described as structurally flawed, not people-driven.
- Each participant may act rationally, but the collective outcome is irrational and harmful.
- Reform should focus on changing payment system architecture, not individual behaviour.
- All trade types involved in residential builds could be affected by progress payment reform.
Related
WA passes new payment protection laws for subcontractors
Western Australia's Parliament has passed new payment protection laws for subcontractors. The changes, made through an amendment to the Building and Construction Industry (Security of Payment) legislation, aim to give subcontractors stronger protection against insolvency.
Why it matters: Subcontractors in WA, including plumbers, electricians, carpenters and other trades, get stronger protection if a head contractor becomes insolvent. This could reduce the risk of unpaid work and cash flow problems.
ATO ramp up of small business debt collection
Master Builders Australia has published a news item saying the ATO is stepping up its debt collection against small businesses. The text provided gives no further detail on the measures, timing or amounts.
Why it matters: Builders and other trade businesses with outstanding tax debts may face firmer ATO collection action, which could strain cash flow. Details are not in the source text, so check the ATO or Master Builders directly.
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Why it matters: Builders and contractors working on or seeking Commonwealth-funded projects could face new employment and supplier requirements. The practical impact is unclear until details of the proposals are released.