The amendment proposed by the opposition to the Building and Construction Industry Security of Payment Amendment Bill 2013 (NSW) has been accepted, and the Parliament website reports that the Bill is now awaiting Assent.
What happens next? Well, presumably there will be Assent, but logic would suggest that the amendments will not be proclaimed until the necessary regulations have been prepared, and these are going to be the subject of further industry consultation, according to the 2nd reading speeches. Hopefully, the Regulations will curtail the operation of the Act itself – which provides for the supporting statement to refer to all subcontractors – such that only those subcontractors directly engaged by the head contractor are covered. In this way, the provision will be a Bad Thing instead of a Very Bad Thing. In any event, the consultation process will take a little while, such that the unhappy consequences I predicted in my post on 13th November are still a step away.
What of the opposition amendment for compulsory statutory construction trusts? Whilst it did not support the Collins recommendation to implement statutory construction trusts, it did commit to a trial of Project Bank Accounts, based on the UK model. This trial is to commence in 2014 on selected Government construction projects. The West Australian Government appears to be on a similar track.
It is understood that the NSW Government does not presently intend to utilise the regulation making powers that the opposition amendment provides for in relation to statutory retention money trusts. Meanwhile, the NSW Government is proceeding with its previously announced approach on the matter of retention trusts – the release of a consultation paper, outcomes of that process back to Government and the preparation of a draft Bill for stakeholders’ consideration.
It would be a Good Thing, of course, if the Federal Government were to act on the Society of Construction Law Australia’s Report on all of this, due out shortly, which suggests a national rationalisation of all of this stuff. But Good Things do not always happen.