Consultation Security of Payment Amendment Regulation

Security of Payment Amendment Regulation

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  • The Issue

    Consultation period: 27/05/2019 12:00 am to 21/06/2019 5:00 pm

    What is this about?

    The NSW Government is continuing to progress reforms to the building and construction industry to provide greater financial security and prompter payments for subcontractors.

    Amending the Regulation is required to facilitate commencement of the Building and Construction Industry Security of Payment Amendment Act 2018 (the Amendment Act).

    What has happened so far?

    The Amendment Act was assented to on 28 November 2018 and will commence on 21 October 2019. It contains reforms to the Building and Construction Industry Security of Payment Act 1999 (the Act) to promote cash flow in the supply chain, increase transparency of payments and provide greater protections to subcontractors.

    What are the changes?

    The Building and Construction Industry Security of Payment Amendment Regulation 2019 (the amending Regulation) contains only those reforms which are critical to facilitating commencement of the Amendment Act. These reforms include:

    • exempting owner occupier construction contracts from the operation of the Act,
    • specifying the offences with respect to retention money trust accounts as executive liability offences, and
    • specifying the offences under the Act and Regulation for which penalty notices may be issued and the amount of the penalty payable.

    Next steps

    The Building and Construction Industry Security of Payment Amendment Regulation 2019 (the amending Regulation) has now been finalised and published. The Amendment Act and amending Regulation will commence on 21 October 2019.

    Fair Trading is currently undertaking targeted stakeholder consultation to inform the development of the Code of Practice for authorised nominating authorities.

    Fair Trading will continue to consult with stakeholders on further amendments to the amending Regulation with a view to publicly releasing a draft amending Regulation later this year.

    More information about the progress of the review will be made available on this website.

    Have your say

    Stakeholders and interested parties were invited to review the amending Regulation and provide comments during the period of 27 May to 21 June 2019.

  • Milestones

    • August 2018: exposure draft Bill with accompanying explanatory statement was released, and a consultation paper on a proposal for a statutory trust for public consultation
    • September 2018: Consultation ended
    • 21 November 2018: The Building and Construction Industry Security of Payment Amendment Bill 2018 passed Parliament
    • 28 November 2018: The Building and Construction Industry Security of Payment Amendment Act 2018 assented
    • December 2018: Options paper released for consultation on the implementation of the Security of Payment Reforms
    • May 2019: Draft Regulation released for public consultation
    • June 2019: Consultation ends
    • July 2019: Draft Regulation approved by the Governor
    • 21 October 2019: The Building and Construction Industry Security of Payment Amendment Act and the Building and Construction Industry Security of Payment Amendment Regulation 2019 will commence.

  • Outcomes

    The Building and Construction Industry Security of Payment Amendment Bill 2018 (the Bill) has passed Parliament.

    The Bill received assent from the Governor on 28 November 2018 becoming the Building and Construction Industry Security of Payment Amendment Act 2018 (the Amendment Act). The Amendment Act will commence on 21 October 2019.

    The Amendment Act will strengthen the security of payment framework while improving the operation of the Act and facilitating greater confidence within the industry of the Act’s ability to facilitate cash flow along the construction chain.

    Key reforms include:

    • providing a statutory minimum entitlement to make a payment claim at least once per month, for work done within that month,
    • re-inserting the requirement for the endorsement of payment claims,
    • allowing claimants to make a final payment claim where a contract has been terminated,
    • shortening payment due dates,
    • enabling subcontractors to be able to inspect the retention money trust account records,
    • enabling the Minister to make a code of practice for Authorised Nominating Authorities, and
    • new investigative and enforcement powers to investigate, monitor and enforce compliance with the Act.

    The Amendment Act is available on the NSW Legislation website.

    View the submissions here

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