Wednesday, 1 May 2024

Environment and Planning Committee

Employers and Contractors Who Refuse to Pay Their Subcontractors for Completed Works

Martin CAMERON (Morwell) (10:58): I rise to speak on a committee report today, and it is the Environment and Planning Committee report on our inquiry into employers and contractors who refuse to pay their subcontractors for completed works. I was lucky enough to be on this committee, and there are a couple of other committee members in the chamber at the moment. I think the results that we got out of these committee hearings will go towards enlightening a lot of people around the place about what goes on with subcontractors that are working on building and construction sites not only in regional Victoria but also in inner-city Melbourne and the process of subcontracting. I am talking about the carpenters, the plumbers, the electricians and the tile layers that are down the bottom of the payment scheme and the payment plan and how hard it is for them sometimes to be paid by the overarching, number one builder as the money filters down. It is like a pyramid – people get paid on the way down, and the tradies are at the bottom.

This is something that has gone on for a very long time. I know I have suffered from this myself working for builders at times. It is not that you do not get paid; it is that it is a very slow payment process. What that does is hamstring these subcontractors into not having the cash flow to be able to pay their bills. They need to be able to put food on the table for their families, but they also need to be able to go and pay for their materials and they get intermittent payments for the works that they have done. They have done a fair day’s work; they need to have a fair day’s pay for each and every single day’s work that they do. A lot of the time we find that contractors are working on the next job and still have not been paid for the previous job. It does get into a little bit of a vortex where you are sucked into having to complete work on future projects when you have not been paid for the work that you have already done.

This happens not only, as I said, in regional Victorian but also on city jobs. As we worked through our committee hearings – and I do wish to thank everyone that put their hand up, from individual tradespeople to the union movement and government corporations, because it is right across the board where this does go on – we had them come in and sit down to let us speak to them and get to the nuts and bolts of why they think this does go on. The payment process is a concern, but hopefully with the 28 recommendations that we did put forward we can move on in future and make sure that especially young tradespeople that are coming into the industry have that little bit of extra protection. As I said, most builders and contractors do put the money out and try and pay, but it is just that long lag process of getting paid that does make it a little bit hard.

We found out that if you are a subcontractor and you are having issues, there is a security of payment law that you can access. A former tradie myself, I did not know that this was a lever that could be activated in my business, but going forward I want to make sure that all other people that are involved in this have that lever to use. It was a great committee to be a part of. We found some hard issues that need to be addressed, and I think we did address these issues in our recommendations that we put forward.

Thank you to our chair the member for Wendouree, who did a fabulous job. We had the member for Bass, the member for Monbulk, the member for Nepean, the member for Ripon, the member for Croydon, the member for Warrandyte and me, being the member for Morwell, on the committee. It was great to be able to work together to get some results. Also a big shout-out to the secretariat that was onboard as well. We are only as good as what they are, and they were fantastic in organising everyone to come in so we could sit down for a chat and then be able to hand over the report. It was a great inquiry; we are moving on to our next one. I commend the committee report to the house.