❓ Mr. Catania questions the Premier on the omission of cascading statutory trusts in the Building and Construction Industry (Security of Payment) Bill, referencing federal Labor's policy and expert support. The Premier defends the decision, citing industry concerns about cash flow impacts and ongoing consultation.
AnsweredQoN 190Legislative Assembly
QuestionView source ↗
BUILDING INDUSTRY —
SUBCONTRACTOR PROTECTION
190. Mr V.A. CATANIA to the Premier:
Firstly, I would like to acknowledge
Helen and Colin, who are subcontractors in Parliament today and who have lost
$450 000 from a construction company that has gone into administration.
I refer to federal Labor's
policy commitment in 2019 to introduce cascading statutory trusts that says
that cascading trusts will protect subbies from the poor performance and bad
behaviour of some of the big builders. Given the strong support for cascading
trusts by WA Labor and federal Labor as well as legal experts, such as John Fiocco
and John Murray, why did the Premier not include such provisions in his version
of the Building and Construction Industry (Security of Payment) Bill?
SUBCONTRACTOR PROTECTION
190. Mr V.A. CATANIA to the Premier:
Firstly, I would like to acknowledge
Helen and Colin, who are subcontractors in Parliament today and who have lost
$450 000 from a construction company that has gone into administration.
I refer to federal Labor's
policy commitment in 2019 to introduce cascading statutory trusts that says
that cascading trusts will protect subbies from the poor performance and bad
behaviour of some of the big builders. Given the strong support for cascading
trusts by WA Labor and federal Labor as well as legal experts, such as John Fiocco
and John Murray, why did the Premier not include such provisions in his version
of the Building and Construction Industry (Security of Payment) Bill?
AnswerView source ↗
Firstly, I acknowledge all those
subcontractors and people who have been impacted by what has happened with
Pindan. It is no doubt a very difficult situation for those hardworking people.
We are doing what we can, certainly in terms of government projects, to ensure
that payments owed by the state continue to be met.
In terms of law reforms, we
obviously introduced some law reforms in the last Parliament, particularly in
the area of retention trusts, phoenixing and
a range of other things to try to deal with some of the issues whereby
subcontractors are impacted by the insolvency of a head contractor. That
legislation did not get through the last Parliament. As members will all
recall, under the arrangements in place at that point in time in the upper
house, everything was held up and we were unable to get legislation through.
However, in this Parliament, of course, that legislation will get through and
that is one of the advantages of what occurred in the election, whereby
important legislation that will assist the people of Western Australia will be
able to pass through the Parliament without some of the appalling practices of
the opposition in the upper house.
Several members interjected.
The SPEAKER : Order, please!
Mr M. McGOWAN : I think that
is one of the reasons why the people voted the way they did in March this year—to
ensure that a government that is sensible, reasonable and responsible can
actually pass its legislation. That is one of the reasons that occurred.
In terms of the legislation itself,
obviously, under the former Minister for Commerce—the Attorney General—and
I think it might have also been under the former Treasurer and the Minister for
Industrial Relations, a review was undertaken by John Fiocco. He recommended a range
of things. The government decided to split it in two simply because it wants to
make sure that everything it does is in consultation with industry and that it
does not move in ways that might have adverse consequences for industry that
may make the situation worse. In relation to cascading trusts, the advice I have
is that no other government in Australia has implemented it at this point of
time. Cascading trusts can have a dramatic
impact on a contractor's cash flow. In the contracting industry,
contractors rely on cash flow to fund existing projects, particularly new
projects they move onto. It is a well-established system that has gone
on for a long time. When we want to make changes, we want to make sure we do
not make the situation worse. The Attorney General, I think it was, when he was
Minister for Commerce, consulted with industry extensively about these matters,
and industry was quite concerned about the rapid implementation of cascading
trusts and the impact that might have on the cash flow of major contractors and
the fact that it might actually have adverse outcomes. Therefore, we did not
implement any of those changes. We will continue to review that and continue to
work with industry, but the legislation we have brought forward obviously is an
important change and will improve the situation immensely. Whether we do
cascading trusts, we will work with industry and certainly consult on all those
things to make sure that whatever we do does not actually have any adverse
impacts beyond the existing situation.
subcontractors and people who have been impacted by what has happened with
Pindan. It is no doubt a very difficult situation for those hardworking people.
We are doing what we can, certainly in terms of government projects, to ensure
that payments owed by the state continue to be met.
In terms of law reforms, we
obviously introduced some law reforms in the last Parliament, particularly in
the area of retention trusts, phoenixing and
a range of other things to try to deal with some of the issues whereby
subcontractors are impacted by the insolvency of a head contractor. That
legislation did not get through the last Parliament. As members will all
recall, under the arrangements in place at that point in time in the upper
house, everything was held up and we were unable to get legislation through.
However, in this Parliament, of course, that legislation will get through and
that is one of the advantages of what occurred in the election, whereby
important legislation that will assist the people of Western Australia will be
able to pass through the Parliament without some of the appalling practices of
the opposition in the upper house.
Several members interjected.
The SPEAKER : Order, please!
Mr M. McGOWAN : I think that
is one of the reasons why the people voted the way they did in March this year—to
ensure that a government that is sensible, reasonable and responsible can
actually pass its legislation. That is one of the reasons that occurred.
In terms of the legislation itself,
obviously, under the former Minister for Commerce—the Attorney General—and
I think it might have also been under the former Treasurer and the Minister for
Industrial Relations, a review was undertaken by John Fiocco. He recommended a range
of things. The government decided to split it in two simply because it wants to
make sure that everything it does is in consultation with industry and that it
does not move in ways that might have adverse consequences for industry that
may make the situation worse. In relation to cascading trusts, the advice I have
is that no other government in Australia has implemented it at this point of
time. Cascading trusts can have a dramatic
impact on a contractor's cash flow. In the contracting industry,
contractors rely on cash flow to fund existing projects, particularly new
projects they move onto. It is a well-established system that has gone
on for a long time. When we want to make changes, we want to make sure we do
not make the situation worse. The Attorney General, I think it was, when he was
Minister for Commerce, consulted with industry extensively about these matters,
and industry was quite concerned about the rapid implementation of cascading
trusts and the impact that might have on the cash flow of major contractors and
the fact that it might actually have adverse outcomes. Therefore, we did not
implement any of those changes. We will continue to review that and continue to
work with industry, but the legislation we have brought forward obviously is an
important change and will improve the situation immensely. Whether we do
cascading trusts, we will work with industry and certainly consult on all those
things to make sure that whatever we do does not actually have any adverse
impacts beyond the existing situation.
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