Construction reforms criticised by WA Opposition


August 12, 2016 15:39:12

Changes designed to protect subcontractors on State Government construction projects do not go far enough, the West Australian Opposition has warned.

The Government has announced plans to introduce project bank accounts on all contracts worth between $1.5 million and $100 million.

Funds will be safeguarded in a government-controlled trust account to ensure subcontractors are paid in full and in a timely fashion.

The move came after a series of pay disputes at major projects including the new Perth Stadium, Perth Children’s Hospital and Elizabeth Quay.

However those disputes would not have been prevented under the new strategy because their contracts exceed $100 million.

Labor’s shadow finance minister Rita Saffioti said the change did not make sense.

“Some of the key projects where we’ve had significant issues have been major projects,” Ms Saffioti said.

“So it seems completely strange that we would apply a certain rule to contracts under $100 million but not to other projects.

“We’ll do whatever we can to make [the reforms] stronger.”

Finance Minister Marmion said while the construction reforms were only targeted at mid-sized government projects for now, they would be used as a trial to test whether they should also be applied to larger works.

“This is the first step. This will involve about $250 million of State Government contracts,” he said.

“If it works, there is the option of course for the Treasurer [Mike Nahan] to implement them. That will be a call for him.”

Reforms should be extended: subcontractor

The planned changes also include a contractors’ code of conduct, increased powers for the Small Business Commissioner to resolve pay disputes and a new building and compliance unit within the Department of Commerce.

The reforms have been welcomed by the head of a landscaping company caught up in the collapse of a contractor tasked with government building works, CPD Group.

However Frogmat executive director Terry Delane said they should go further.

“We would like all the measures to be implemented right across industry,” Mr Delane said.

“It’s a big animal, there’s a lot of businesses involved and it’s not an easy thing to turn around.

“[But] the important thing is that the Government has bitten the bullet, said ‘enough is enough’ and we’re moving forward in a positive way.”

The project bank accounts will be introduced at the end of September, while some other changes will require legislation to be introduced to State Parliament.







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