Tuesday, 28 October 2025

 David DAVIS (Southern Metropolitan) (21:44): I rise to make a contribution to this particular bill, the Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Bill 2025. I make the point that the opposition will not oppose this bill. It is a bill that does some worthy things, but we have some reservations about it. It amends the Building and Construction Industry Security of Payment Act 2002 as part of the government’s response to the parliamentary inquiry into employers and contractors. It amends the Building Act 1993 to improve the effectiveness of the Victorian Building Authority as a regulator. God knows the VBA needs it. It has struggled over so many years.

Harriet Shing: It doesn’t exist anymore, mate.

David DAVIS: Well, whatever you want to call it. You can call it whatever you like, but the building regulation in this state has been a shambles, as you well know. It has been trading as the Building and Plumbing Commission, more correctly, but it is the VBA by another name. The bill improves the regulator’s effectiveness by delivering building surveyor and building inspector registration reforms, by enabling the commission to create a code of conduct for licensed and registered plumbers and by making minor changes to a number of the information statement requirements for building surveyors.

It also delivers a number of changes to the Planning and Environment Act 1987, widening the scope of enforcement orders by VCAT to require native vegetation offsets, amongst other remedies. It will be interesting to see how that is applied, as the government applies its high-rise, high-density matters in the city and as it rolls over vast areas of vegetation, some of it native vegetation and some of it not. But it will be interesting to see whether any native vegetation is protected in the city as they push to have high towers and dense developments – I suspect not.

Mr Welch and I have both been very concerned about the intense development that is proposed along a number of creeks in the middle of metropolitan Melbourne, where there is significant native vegetation that needs to be protected. I will bet my boots that not much of that is protected by this bill and that the government will roll over that, as it intends to do with its forced high-rise, high-density development. Good luck to those who want to protect native vegetation, because that is not what this government is about. It is about rolling over native vegetation and damaging it as much as it can to cause as much devastation across our suburbs as it can possibly achieve.

The security of payment act was enacted in 2002 and has been amended a number of times since. The need to make sure that there are fair arrangements there is legitimate, and there are some matters which are legitimate. This aims to improve the fairness and security of payments for subcontractors and contractors in the building and construction industry. The 2023 parliamentary inquiry had nine recommendations and 28 findings. Its protections for subcontractors were put into two tranches: hierarchical structure of the industry and late, non-payment or underpayment. There is also an additional aspect about unfair contractual provisions. A number of these are important steps that the bill does address in part.

The bill has a high level of contractor and subcontractor focus, but it also creates a number of concerns for builders. The legislation focuses on a number of these areas, as I say, aimed at enhancing protection for contractors against non-payment for partial or completed work. This is the first, we are told, of several potential bills dealing with the financial arrangements in the building and construction industry that are expected to come to the Parliament over the next period. A number of the reforms in this bill remove the excluded amount regime. Contractors can now claim for scope variations, delay costs, latent conditions and legislative changes that were previously excluded. It removes reference dates. Instead of relying on reference dates, claimants can make one claim per calendar month. The summer blackout period is from the end of December to 10 January. Enforcement and adjudication timeframes are suspended. On time limits, payments must be made within six months of performing the work. In terms of faster payments, respondents must pay progress payments within 20 business days of a claim being issued, so this does speed some aspects up. On the adjudication changes, respondents can only rely on reasons set out in the payment schedule. No new reasons can be added later. Unfair contract terms and notice-based time bars can be declared unfair and unenforceable. And on performance security, there are new statutory rights for the release of and restrictions on recourse to performance security – for example, bank guarantees.

As I said, there are changes in respect of surveyors and inspectors and reforms to the registration system. There is a plumbing code of conduct, which authorises the development and enforcement of such a code by the Building and Plumbing Commission, as outlined by Ms Shing a moment ago correctly with the new name. Other legislation amended is the Environment Effects Act 1978, the Planning and Environment Act 1987 and the Heritage Act 2017.

There is retrospective application. We are always cautious about retrospective application, and that makes us cautious on a number of these points. On the industry impacts, the reforms are expected to increase the number and value of payment claims and adjudications, requiring businesses to update contract and administration practices and improve payment transparency and fairness with respect to contractors. In effect, unpaid and delayed invoices have been a significant concern in the construction sector, with subcontractors often feeling the biggest pressure. In theory, this should make dispute resolution faster and more effective, but we will see as it comes forward if it actually operates in that way. The bill is part of a broader framework of reforms designed to protect consumers and workers by reinforcing confidence in the building industry, and to that extent we see some positive side to this.

The opposition, however, has a number of concerns. We do think there will be increased disputes and adjudications, and this will add to legal costs, as principals and head contractors may dispute more claims, so this will be something of a lawyers’ picnic. Cash flow for principals is an issue. They will be required to pay out larger progress claims, even for disputed or unproven amounts, until the dispute is finally resolved. There is a risk of overpayment if a claimant is later found to be not entitled to the amounts. The principal may face some significant challenge in recovering paid funds. And I know the President understands these sectors of the economy very well.

A greater administrative burden is a significant aspect of this too. Respondents must carefully review and respond to a wider range of claims, increasing the administration workload for contract managers and legal teams with tighter timeframes and likely more complex documentation compliance. There is a risk of overlapping claims due to the removal of reference dates, whereby claimants can submit one payment claim per calendar month, which may lead to disputes or overlapping claims for the same work. We think these are legitimate points to raise. Respondents may be barred from raising new reasons for adjudication. Respondents will only be able to rely on defences and reasons set out in the payment schedule.

In terms of retrospective application, as I said, there are some issues here. Parties who negotiated contracts under the old regime may find themselves noncompliant and needing to renegotiate terms. That does seem to be patently unfair. It may well have been better if this had been written in such a way that this was a prospective approach. There is a question of flexibility for principals. As I said, there is a requirement to give five business days notice before calling on retention money, and this may delay urgent action in cases of genuine contractor default.

We should have a system that is fair, we should have a system that works smoothly, and we should have a system with the minimum legal input and legal costs. In that sense it is not clear that that has quite been achieved. Very much we look at this bill and we say that on balance this is not a bill that we want to oppose because there are some legitimate aspects that are being addressed, but there are also potentially other new and unfair aspects that may result. Certainly there has been significant consultation on this. While many in the building and construction industry acknowledge there are issues around payments to subcontractors, this legislation attempts to reconcile delays. But there is no great clarity that it has actually struck the right point. Overall it is a bill that we do not want to oppose, but we do have those legitimate reservations. Let us also be clear: the Victorian Building Authority – or the building commission, or whatever you want to call it these days – has had a tawdry history. It is being slowly cleaned up. That is a positive set of steps. I know the work that is being done there is significant. We do need a construction sector that has proper oversight on a number of levels.

We have seen in recent weeks and recent months very significant stories come forward about the corruption and problems with the CFMEU. This is the other part of the construction sector that the government refuses to properly grapple with. I know the government tries to say that this is a federal matter. Well, it is not quite true. They actually can do a lot on government sites here in Victoria, and they choose not to do much on those government sites. They choose to turn a blind eye, by and large, to the corruption, to the bikie gangs, to the frank misuse of public money. It is no wonder that there are huge surges in cost for these projects when you have got frank and outright corruption running rife through government projects across the state. There is a huge amount of cost overrun in the major projects, more than $50 billion, that is $50,000 million. This is not the cost of the projects, this is the overruns.

People are talking today on the TV about the West Gate Tunnel. Well, the West Gate Tunnel is a case in point. It is at least twice its original estimates, and it is three years late. It is massively, massively mismanaged by this government. It was a Transurban market-led proposal, almost certainly corrupt the way the then Treasurer Tim Pallas was led along by Transurban and later had staff of his over there at Transurban very quickly, within months.

Ryan Batchelor: Go outside this chamber and say that.

David DAVIS: Well, you cannot tell me that what I am saying is wrong. You cannot; it is actually right. Everyone knows it was crooked. Everyone knows it was corrupt. The market-led proposal: they saw them coming, and God knows what money changed hands on this to grease the wheels on this. The involvement of those staff who quickly hopped over to Transurban – I mean, it was just shocking.

Ryan Batchelor: On a point of order, President, on relevance, I am not sure this part of Mr Davis’s contribution is relevant to the bill before the chamber.

David DAVIS: On the point of order, President, I am talking about the construction industry. I am talking about fairness. I am talking about payments and the regulation of the construction industry, and I have brought one aspect of that regulation, amongst others, to the chamber’s attention. One of those relates directly to the regulation of the industry, the role of the CFMEU and corruption within that sector.

The PRESIDENT: Thank you for that point of order. I was going to call Mr Davis back to the bill, but given that it is 10 o’clock, pursuant to standing orders, I need to call the minister.

Business interrupted pursuant to standing orders.

Ingrid STITT: Pursuant to standing order 4.08, I declare the sitting be extended by up to 1 hour.

David DAVIS: As I said, my concerns on these matters are that massive government spending is occurring. Of course the construction sector is much more than government spending – there is the whole private sector – but the government is a significant purchaser of construction in this state. The government has not always been a good payer. One of the things I would say about security of payments is that the government has not always been a good payer – but it is a good payer if you have got one of those construction arrangements where the CFMEU is involved. Then it pays, and it pays very, very well. You can get onto the gravy train and you can get the payments – the massive surges in payments. In many of these parts of the construction sector we have got the alliance model operating, which is a very generous model for the head contractors and many of the contractors who are lower down the chain. The decisions are made – it is almost like a cost-plus contract. President, you will understand what I am saying here. In the olden days, you would sign up for your house and you would do a fixed price, but you could also do a cost-plus arrangement. They were always much harder to keep on track and keep costs under control for if you were the purchaser. It is very much like the way the alliance contracts are now working in this state. We see these contracts surging absolutely out of control because of the cost control weaknesses inside this government.

On top of that, as I say, there is the corruption that is associated with the bikie gangs and the CFMEU. We strongly support fair regulation of this industry, but we do not think subcontractors should be targeted because they are not CFMEU-linked. We do not think the CFMEU should act as the gatekeeper on sites. We do not think the CFMEU should be in a position where they can bring in a bikie gang member to enforce their view on a site or on a major project. We think that is wrong, and we think that one of the things in the construction sector that has got to be more directly and more fully addressed by this government is this problem that has developed.

Let me be clear. In 2015, after the government had changed – within a month of the government changing in January 2015 – one of the first things Daniel Andrews and his brand new government did was get rid of the code unit in the Department of Treasury and Finance. The code unit required those who were employed on major public sites to sign up to a construction code. It required compliance with legislative arrangements, federal and state, but it also laid out a code of practice for how you could behave on these sites. It was a requirement that you signed up to these details if you were undertaking work on a major government project. You did not win the contract unless you agreed to sign up to the code unit requirements and the construction code in Victoria. That did clamp down on a number of the rorts and the corruption on those sites. It was actually bitterly fought by certain parts of the union movement, but it did actually help constrain the blowouts that had been part of costs under the Brumby government. But Daniel Andrews abolished that code in January 2015, and we have seen the surge in costs on projects and we have seen the inability of government to constrain the corruption on sites ever since. So in this bill the security of payments is absolutely important, but the wider context in the construction industry is that we also need to make sure that the behaviour in the industry is fair, that those who are not union members are not targeted and that those contractors who wish to offer prices that are competitive but who are not liked by the CFMEU are able to make those bids and are not in fear of their life or in fear of their business and their future in the sector.

I am a person who keeps significant scrutiny on the government through freedom of information. At the moment, we are waiting for a decision on a freedom-of-information case that relates to two documents. These are briefings to Jacinta Allan, the then Minister for Transport and Infrastructure. She is obviously now the Premier. Those two documents, 25 pages in total between the documents, are documents that were emailed to Jacinta Allan in her capacity as minister for transport infrastructure. So it is a job email. It is not a personal email. The government, the agency, the Department of Transport and Planning, has refused to release those particular documents.

VCAT is obviously going to have its say. But you know what? What was extraordinary in the public hearing that occurred is that just about 15 minutes before the end of the hearing time, the government introduced a new ground for retaining the documents: section 33(2A) of the Freedom of Information Act 1982, that the security or the safety of individuals may be compromised. Now, my point in open court was to say, ‘Well, you are introducing this now, well over 12 months after this matter started. You are introducing it 15 minutes before the end of the hearing. You have not produced one scintilla of evidence,’ but the actual assertion essentially was that somebody would be harmed by the release of this information.

It is a dangerous business in this construction industry. President, you understand, having worked in the sector, there is danger on work sites on a number of levels. There is a need for good occupational health and safety. But that was not the danger that was being referred to here. This was a danger that somebody might hurt or threaten somebody because information had been released. I must say, claiming section 33 in this way is quite a new twist, quite a new weave, from this government. It does point to the serious risks that exist in our community with the CFMEU rampant, with the very significant threats. We have seen Indigenous workers – we have just seen the Statewide Treaty Bill 2025 pass through its second reading vote – but we know that on some of these work sites, if you are not in the right group that the CFMEU has ticked off, you are in the wrong group. An Indigenous group that is not ticked off by the powers, the motorcycle gangs on the sites, will be drummed out. That is what has happened. Certainly I had representations and other government ministers had representations. There is no doubt that Jacinta Allan had representations as well, but she chose not to act on these matters.

We are dealing with some issues of fairness and unfairness in the construction industry, but other issues are too hot for this government to handle. They do not want to touch anything that touches the CFMEU, anything that touches the motorcycle gangs, anything that touches this frank corruption on our business sites. It is no wonder the costs are out of control. I say we have got to properly regulate our building and construction sector, the public sector, but the private sector side of it as well. This bill is a small contribution, but there are large licks of territory that have not been addressed.

 Ryan BATCHELOR (Southern Metropolitan) (22:10): I am pleased to rise to speak on the Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Bill 2025, a bill which is the latest in a series of pieces of legislation the government has brought to the Parliament to improve the building and construction sector. It is part of a series of reforms that this government is making to make sure that there are more homes being built in Victoria, because we want to give all Victorians the opportunity to own a home in the communities that they love. That is at the core of what has been driving the housing agenda, the building agenda and the planning agenda, that are being pursued by the Allan Labor government.

What we are doing in this state as a result of the policy directions of this government is we are approving more homes to be built than in any other state. We are starting construction on more homes than any other state, and we are completing construction on more homes than any other state in the country. There are more approvals, more commencements, more completions of homes in Victoria than in any other jurisdiction – more than New South Wales, which is a larger jurisdiction than Victoria. There are more people in New South Wales than there are in Victoria, but we are building more homes right here in Victoria than anywhere else in the country. That is as a result of a government that is determined to see Victorians have the opportunity to buy a home in the communities that they love – that is what is driving our policy agenda. That is what we want to see: more homes being built so that more Victorians have the opportunity to have a place of their own that they call home in their communities. That is exactly what we are doing.

And unlike the Liberal Party, unlike those who want to block and say no to people having homes, we want to make sure that Victorians can have a home in the communities that they love. That is why our reforms, whether they are in planning, whether they are in building, are demonstrating that we can approve more homes, we can commence more homes and we can complete the construction of more homes than any other jurisdiction in this country. This legislation –

David Davis interjected.

Ryan BATCHELOR: In fact we are miles ahead, Mr Davis, of any other jurisdiction. What these reforms today are doing is putting another reform piece in the reform agenda. Over the last six months we have introduced and passed the Building Legislation Amendment (Buyer Protections) Bill 2025, which creates the new Building and Plumbing Commission, replacing the old Victorian Building Authority and creating a one-stop shop for building complaints and concerns. We have also recently introduced and passed the Domestic Building Contracts Amendment Act 2025, which significantly reforms the regulatory system for domestic building contracts, giving officers more power to order rectification and defective building works when disputes arise.

Victorians deserve a building regulatory system which gives them the confidence they need to build, buy and rent homes in this state. This bill, the fairer payments on job sites bill, delivers again on our commitments to do just that. It also delivers on the commitments made in the government’s response to the parliamentary inquiry in 2023 into employers and contractors who refuse to pay their subcontractors for completed works. This bill makes amendments to the Building and Construction Industry Security of Payment Act 2002, implementing 15 reforms recommended by the inquiry, reforms that will improve a subcontractor’s ability to recover payments for completed construction work and goods and services supplied to a construction project. All these reforms will improve outcomes for all participants in the building industry, including practitioners, including subbies, including consumers, industry associations and others. It is part of a broader package of reforms that the Allan Labor government is making to Victoria’s building regulatory framework. It continues our strong track record of nation-leading reforms to lead the nation in construction, to lead the nation in commencements and to lead the nation in completions of new homes.

The main change in this bill is to the Building and Construction Industry Security of Payment Act 2002, which has not been substantially updated since 2006, nearly 20 years ago. The policy intent of the principal act has always been to ensure that subbies are paid in a fair and timely manner for their work. However, the 2023 inquiry to which I have referred found that the act has not been keeping up with industry expectations, and to improve payment practices for subcontracted tradies the inquiry made 28 recommendations. In the government’s response to the inquiry we accepted 16 of the recommendations in full; the remaining 12 were accepted in part or in principle. One of the recommendations which we accepted in full did not require legislative changes and has already been actioned. Sixteen recommendations required legislative change. This bill amends the Building and Construction Industry Security of Payment Act to implement these recommendations. We will continue to consult with consumer groups, unions and industry as we plan how to implement the remaining 12 recommendations.

The 15 recommendations which were supported in full by the government and are delivered by this bill are designed to keep job sites fairer and keep the construction industry in Victoria growing to meet the growing need for housing in our state. It is important to remember that these changes are not only needed to protect subbies from bad faith payment disputes – most Victorian builders and contractors work in good faith and want to see their tradies paid as efficiently as possible – but head contractors will benefit from the changes, which will weed out dodgy operators and those who are undercutting the business. The bill implements a series of recommendations to enable contractors to claim a progress payment calculated in accordance with the contract; removes the concept of reference dates and inserts a statutory entitlement to claim payment; amends the definition of a business day to also exclude the period between 22 December and 10 January; and amends provisions stating that notice-based time bar clauses can be declared unfair by an adjudicator if compliance with the clause is not reasonably possible or would be unreasonably onerous.

It further inserts a head power into the building and construction regulations to prohibit unfair construction contractual clauses; extends the time limit on claiming payment from three to six months; imposes maximum time limits on payments of terms 25 business days after the payment claim has been made; expressly provides for an entitlement to claim retention money and empowering an adjudicator to decide whether, how much and when retained monies are to be returned; tasks the Building and Plumbing Commission with ongoing responsibility for promoting and educating the construction sector in relation to security of payment law; prohibits respondents from including new reasons in their response to an adjudicator that were not previously included in the payment schedule; provides respondents with five business days to provide a payment schedule in response to an adjudication notice; provides that an adjudication determination must be made within 10 business days of receipt of a respondent’s adjudication response, permitting parties to extend the determination deadline for up to 20 business days by agreement; removes the scheme for new adjudication for review of adjudication determinations; enables electronic service of notice and papers; and provides that any adjudication certificate may be filed as a judgement for debt in a court of competent jurisdiction and be enforceable accordingly.

This is another step in our plan to improve the building and construction sector in this state – an important component in this government’s ongoing determination to ensure that more homes are built in Victoria. It is a determination that is delivering more approvals of new homes in Victoria than in any other state, it is delivering more commencements of constructions of new homes in Victoria than in any other state and it is delivering the completion of more homes in Victoria than in any other state. This Allan Labor government is on the side of Victorians who want to own their home.

 John BERGER (Southern Metropolitan) (22:19): Today I rise to speak on the Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Bill 2025. The bill makes critical amendments to the Building and Construction Industry Security of Payment Act 2002, amongst others, to ensure Victorian workers in the construction industry are paid fairly for the work that they do.

Construction workers are crucial to the state of Victoria. Construction is the fourth-largest employer in our state, and it is projected that 68,600 new workers will enter the industry by 2027, and from now to 2034 this number will increase to 162,900. We will most certainly be needing this growth in the construction and building industry, with our state population projected to increase by 10.3 million by 2051, and we will need to build 2.24 million new homes in that timeframe. The Allan Labor government has a plan to do just that, with targets to build 800,000 new homes by 2034 in accordance with Victoria’s Housing Statement: The Decade Ahead 2024–2034. As of June this year over 52,000 homes have been approved for construction, including 10,000 new social and affordable homes through the Big Housing Build. Through the development facilitation program over 6900 homes have been fast-tracked for approval in two years, and overall, over 10,000 new homes have been fast-tracked for approval through various processes.

But none of these homes can be built without construction workers, and they deserve to be paid fairly for this work. This bill establishes provisions in legislation to ensure just that, with the purposes set out as follows: firstly, to amend the Building and Construction Industry Security Payment Act 2002 in relation to claims for progress payments, claims for the release of performance securities, the process and adjudication of disputes relating to progress payments and the release of performance securities, adjudication determinations, unfair construction contract provisions and the service of documents; secondly, to amend the Building Act 1993 in relation to the registration of building surveyors and building inspectors, certainty of the information statements given by relevant building surveyors, code of conduct for plumbers and minor matters; thirdly, to amend the Environment Effects Act 1978 in relation to the fees to be paid for certain assessments, advice, assistance and determinations under the act and the regulation-making powers; fourthly, to make amendments to the Heritage Act 2017 as required following the enactment of the Climate Change and Energy Legislation Amendment (Renewable Energy and Storage Targets) Act 2024; and finally, to make amendments to the Planning and Environment Act 1987 in relation to enforcement orders.

These changes to legislation are in response to many of the recommendations provided by the parliamentary inquiry into employers and contractors who refuse to pay their subcontractors for completed works, and I would like to thank the members of the Legislative Assembly Environment and Planning Committee for their preparation of this report and their 28 recommendations, of which we have supported 16 recommendations in full, 12 in principle and one in part. I would also like to thank everyone who contributed their submissions to the inquiry – individuals and organisations – to form and shape this bill here today.

This report addresses significant issues in how construction workers are to be paid and compensated for their work in Victoria, including the existence of hierarchical structures in contracting and subcontracting, the widespread use of protracted and late payment schemes and the shifting of risks through the contractual chain of a construction project. In this report referencing the findings of the parliamentary inquiry, representatives from the National Electrical and Communications Association contributed understandings about how financial pressures from protracted payment plans often go beyond the material impacts and affect the wellbeing of business owners, their employees and their families. In 2023 they reported that 74 per cent of workers surveyed found that non-payment impacted subcontractors’ personal lives. These case studies detail where workers, particularly young apprentices, are left for months without wages, receive infrequent payslips, have missed payments and experience contractors leaving the state after going bankrupt. It is clear that the current legislation needs to be strengthened to prevent workers, especially young people and apprentices, from being exploited. This bill will amend the processes that calculate when the payment can be made, replacing the term of ‘reference date’ where the current provisions of the Building and Construction Industry Security of Payment Act 2002 are overly complex and unclear, to achieve further clarity by instead defining this as the last day of each named month in which the services or goods were provided or supplied. This will ensure that workers have clearly interpretable guidelines under which they know they must be paid. I commend the bill to the house.

 Harriet SHING (Eastern Victoria – Minister for the Suburban Rail Loop, Minister for Housing and Building, Minister for Development Victoria and Precincts) (22:24): I move:

That consideration of this matter be adjourned until the next day of meeting.

Motion agreed to and debate adjourned until next day of meeting.