❓ Question regarding the McGowan government's commitment to supporting WA subcontractors through expanding the powers of the Small Business Commissioner. The Minister outlines new legislation to empower the Commissioner to investigate and enforce timely payments to subcontractors on government projects.
AnsweredQoN 60Legislative Assembly
QuestionView source ↗
SMALL BUSINESS
COMMISSIONER — SUBCONTRACTOR PAYMENTS
60. MR S.J. PRICE to the Minister for Small Business:
I refer to the McGowan Labor
government's commitment to supporting Western Australian subcontractors
and ensuring these vulnerable small businesses are properly paid for their work
on government projects. Can the minister advise the house how expanding the
powers of the Small Business Commissioner will help support WA subcontractors
and provide them with unprecedented protection?
COMMISSIONER — SUBCONTRACTOR PAYMENTS
60. MR S.J. PRICE to the Minister for Small Business:
I refer to the McGowan Labor
government's commitment to supporting Western Australian subcontractors
and ensuring these vulnerable small businesses are properly paid for their work
on government projects. Can the minister advise the house how expanding the
powers of the Small Business Commissioner will help support WA subcontractors
and provide them with unprecedented protection?
AnswerView source ↗
I thank the member for his question
and for his advocacy on behalf of subcontractors in particular, but all small
businesses in his electorate and around the state. Small businesses are vitally
important to the state's economy and make up 97 per cent of all
businesses in the state. Many thousands of them are subcontractors. We are all
familiar with the vulnerability that those subcontractors have faced for some
time now with respect to receiving payments—actually getting payments
from primes and even from other subcontractors in the cascading levels of the
distribution of funds.
I am particularly aware and mindful
of this issue because of the experience I had in 2012 with a former constituent—he
has since moved—who became the face of this issue in 2012, when the
Leader of the Opposition was the responsible minister. Max Hannah, as a consequence
of this issue when primes were not paying their subcontractors, ended up having
to sell not only his own home, but also his investment property, which was his
superannuation. He and his partner, Fran, went from owning two homes outright
and having a successful, vibrant business employing dozens of people in my
electorate to having to sell those homes in an effort to retain the business
and keep paying their employees. They were wonderful contributors and their
primary aim was to sustain the business and keep supporting the people they
employed, which they did. Ultimately, they have gone on to retire from that
business. The business was sold. That all came about on a government project.
It was one of the Building the Education Revolution projects, by which the
federal government had given money to the state to build new schools. One would
have thought, as they did, that that would have been gold-plated, reliable
income. Sadly, it was not and it had a massive impact on them. But many
thousands lost everything—marriages broke up, homes were sold and sadly
there were suicides. It was a horrible time and that is very clear in my mind
to this day.
I was very pleased in December last
year to go out with the former Minister for Commerce, now the Minister for
Finance, to announce a range of initiatives providing new protections for
subcontractors on government building construction projects. Amongst those is
the creation of a subcontractors support unit, led by the WA Small Business
Commissioner, who is a wonderful advocate for and defender of small businesses
in this state.
What I am doing today is giving
notice to particularly the other side of the house, and those in the upper
house, that in the first half of this year I will introduce legislation to give
new powers to the Small Business Commissioner under the Small Business
Development Corporation Act. We will amend the act so that the commissioner
will have the power to investigate and compel head contractors on
government-led projects to provide evidentiary support of timely payments to
their subcontractors. Importantly, there will be an anonymity provision that
will enable people to report the failure of a prime to pay them, so those
people will never know whether it was a random audit by the Small Business
Commissioner or a reported incident. The commissioner will also be given powers
to investigate at any time and make recommendations to government on sanctions
to be imposed on head contractors that have not complied with the law.
I hope these changes will be a significant
step up in the defence of subcontractors and will provide certainty for them.
They will have a cop on the beat, someone who they can go to, someone who they
can draw on for assistance who has the teeth and the power to ensure that there
is an outcome. I actually anticipate that this will work. It has not been tried
anywhere else in the country. It will enable the threat of being exposed to be
held against prime contractors on government contracts to ensure that they look
after the people who they contract with. I look forward to support from
everyone in this place and in the other place to ensure that this legislation,
when we introduce it, goes through as rapidly as possible. The unit is already
stood up but we need the laws to enable the Small Business Commissioner to
really go after ensuring that we have a better outcome for subcontractors.
and for his advocacy on behalf of subcontractors in particular, but all small
businesses in his electorate and around the state. Small businesses are vitally
important to the state's economy and make up 97 per cent of all
businesses in the state. Many thousands of them are subcontractors. We are all
familiar with the vulnerability that those subcontractors have faced for some
time now with respect to receiving payments—actually getting payments
from primes and even from other subcontractors in the cascading levels of the
distribution of funds.
I am particularly aware and mindful
of this issue because of the experience I had in 2012 with a former constituent—he
has since moved—who became the face of this issue in 2012, when the
Leader of the Opposition was the responsible minister. Max Hannah, as a consequence
of this issue when primes were not paying their subcontractors, ended up having
to sell not only his own home, but also his investment property, which was his
superannuation. He and his partner, Fran, went from owning two homes outright
and having a successful, vibrant business employing dozens of people in my
electorate to having to sell those homes in an effort to retain the business
and keep paying their employees. They were wonderful contributors and their
primary aim was to sustain the business and keep supporting the people they
employed, which they did. Ultimately, they have gone on to retire from that
business. The business was sold. That all came about on a government project.
It was one of the Building the Education Revolution projects, by which the
federal government had given money to the state to build new schools. One would
have thought, as they did, that that would have been gold-plated, reliable
income. Sadly, it was not and it had a massive impact on them. But many
thousands lost everything—marriages broke up, homes were sold and sadly
there were suicides. It was a horrible time and that is very clear in my mind
to this day.
I was very pleased in December last
year to go out with the former Minister for Commerce, now the Minister for
Finance, to announce a range of initiatives providing new protections for
subcontractors on government building construction projects. Amongst those is
the creation of a subcontractors support unit, led by the WA Small Business
Commissioner, who is a wonderful advocate for and defender of small businesses
in this state.
What I am doing today is giving
notice to particularly the other side of the house, and those in the upper
house, that in the first half of this year I will introduce legislation to give
new powers to the Small Business Commissioner under the Small Business
Development Corporation Act. We will amend the act so that the commissioner
will have the power to investigate and compel head contractors on
government-led projects to provide evidentiary support of timely payments to
their subcontractors. Importantly, there will be an anonymity provision that
will enable people to report the failure of a prime to pay them, so those
people will never know whether it was a random audit by the Small Business
Commissioner or a reported incident. The commissioner will also be given powers
to investigate at any time and make recommendations to government on sanctions
to be imposed on head contractors that have not complied with the law.
I hope these changes will be a significant
step up in the defence of subcontractors and will provide certainty for them.
They will have a cop on the beat, someone who they can go to, someone who they
can draw on for assistance who has the teeth and the power to ensure that there
is an outcome. I actually anticipate that this will work. It has not been tried
anywhere else in the country. It will enable the threat of being exposed to be
held against prime contractors on government contracts to ensure that they look
after the people who they contract with. I look forward to support from
everyone in this place and in the other place to ensure that this legislation,
when we introduce it, goes through as rapidly as possible. The unit is already
stood up but we need the laws to enable the Small Business Commissioner to
really go after ensuring that we have a better outcome for subcontractors.
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