Wednesday, 18 March 2026

 Tim McCURDY (Ovens Valley) (10:14): The report I would like to speak on today is Employers and Contractors Who Refuse to Pay Their Subcontractors for Completed Works. This report was handed down in November 2023, and can I say since this report was handed down I have had a concern with a subcontractor who was working for a contractor at Cobram Primary School in my home town. The SD Group were engaged by Zauner Construction, and my understanding is that their reputation precedes them, Zauner Construction, about their ability or willingness to pay subcontractors. Last year the SD Group, who did the work – the subcontractor – issued an invoice for $205,942.49. This was last year, and I spoke to managing director and owner Graham Solbrandt yesterday. He said they still have not been paid a cent, and that is quite concerning. They still have not been paid as a subcontractor. On the back of that I wrote to the current Deputy Premier in his capacity as Minister for Education with my concerns, and he wrote back to me saying:

However, while the department understands and empathises with this situation, they have advised that any claim for payment by SD Group is required to be pursued under the terms of the sub-contract between SD Group and Zauner. The department is not a party to this sub-contract.

That stresses me, the fact that the government can just wash their hands of it and say, ‘We’ve appointed a contractor, but we take no further responsibility whether that contractor pays the subcontractor.’ If the government are not going to appoint contractors who will pay their bills, clearly they need to change their policy, because just saying they are not a party to this contract is not good enough. SD Group are on the brink of financial ruin. This $200,000 is really biting them. As I say, it is nearly 12 ‍months since that invoice was issued. Surely the department should make some effort to make sure that subcontractors get paid or else make sure that that contractor who took the job on does not get a job again.

I just want to mention a couple of the recommendations that are in this report. Recommendation 2:

The new provision should enable contractors to claim a progress payment calculated in accordance with a contract or, if the contract does not provide for the matter, calculated on the basis of the value of construction work carried out.

Again, this was done in 2023, and we are not seeing progress payments going ahead for the SD Group. Recommendation 6:

The new provision should provide that the Building and Construction Industry Security of Payment Regulations 2023 (Vic) may prohibit unfair construction contractual clauses …

Certainly recommendation 8:

on the date set by the terms of the contract, subject to the payment term not exceeding 25 business days after the payment claim has been made …

We are talking back in May last year, when the subcontractor issued an invoice for $205,000-odd, and now with the 25-business-day period well expired – as I say, it will not be long before it will be 12 ‍months – that subcontractor has not been paid. It is fair to say there is no will by the contractor Zauner to pay. But what concerns me more is the lack of will of the government to make sure that this wrong gets righted. At the moment it is quite unfair for subcontractors, and if we continue down this path, who is going to want to work for the government? Who will put up their hand as a subcontractor if they are not sure that they are going to get paid? We have certainly seen the rorts, and I am not going to go into that, with the CFMEU. But here is another example of the government just not taking responsibility in a construction zone where a subcontractor has done their job, done it fairly and has not got paid. I just appeal to the government. In the few months that they do have left in government they should consider cleaning up their own mess, because it is important that subcontractors who work on government projects get paid.