Trusts recommendation in Security of Payments report would prevent subbies, building workers and small business rip-offs

Published: 22 May 2018

The CFMEU has called on the Turnbull Government to immediately implement the key finding of the Murray report into Security of Payments. The report recommends that progress claims and retention monies be held in statutory trusts.

The union says the reform would help ensure that sub-contractors were protected and workers could be paid.

CFMEU National Construction Secretary Dave Noonan said head contractors are currently able to access these funds for other purposes such as cash flow.

This means subcontractors and employees often go unpaid when builders go into liquidation. It occurs frequently around Australia, and it is a major problem for small business and workers.

“The CFMEU has argued for change in this area for many years, but big developers and construction companies have opposed reform,” Dave Noonan said.

“When clients pay builders on progress claims, builders are meant to pay sub-contractors. However, builders basically treat that money as their own, and often don’t pay their sub-contractor.

“When funds are held in statutory trusts, it is harder for builders to screw over their sub-contractors, and the workers they employ.

“The Turnbull Government now has the blueprint for reform. There is no excuse for delay. 
The Murray report should be legislated to protect small business and workers immediately.

“The Master Builders Association are not committed to this. The Government should not be listening to the representatives of the big end of town, when they can deal with this problem and protect, subbies, small businesses and workers who are ripped off through the contractual chain.”