ABCC recovers more than $13.5 million for subcontractors as its time draws to a close

Australia’s controversial building regulator, the Australian Building and Construction Commission (ABCC), has managed to help subcontractors get more than $13.5 million in invoices paid over past three years.

The ABCC has been involved over the past three years in ensuring security of payment to subcontractors – who are typically small businesses – and this involved it acting on complaints put to it by subcontractors. 

Its latest industry update, published over the past week, says the work done by the regulator on issues related to security of payment was overseen by a working group comprising associations representing employers, the Australian Council of Trade Unions, the government, and the regulator.

Overseeing security of payment to contractors, however, is no longer be a part of the ABCC’s role given the federal government has wound back the scope of its powers in anticipation of legislation that will see the regulator shut down following an election promise by the Albanese government to kill the agency off.

“In the short time we have remaining as an agency, we are working to ensure all desktop audits and security of payment investigations are closed out in a timely manner and recoveries are finalised wherever possible,” the industry update says.

“As explained in the August 2022 edition of Industry Update, following the substantial repeal of the Code, we no longer have jurisdiction to monitor compliance with security of payment provisions of the Code.”

The industry update says that there were 9,133 instances reported by contractors of delayed or unpaid payments between 1 July 1, 2019, and June 30, 2022, with the dollar amount for these reports hitting $873 million over the three-year period.

Of the reports received from contractors, 94% concerned delayed payment, with the balance related to unpaid claims.

Almost 60% of reports made to the ABCC in relation to its role in securing payment had potential issues and the regulator managed to secure voluntary rectification in 97.4% of cases.

“Where the ABCC identifies unpaid claims falling within its jurisdiction, it can assist subcontractors by seeking payment of unpaid claims,” the industry report says. 

“The ABCC assisted claimants to recover more than $13.5 million in unpaid progress claims.”

Industrial Relations Minister Tony Burke revealed on July 24, 2022, that an interim building code with a revised scope of powers for the ABCC was ready to be issued as a preliminary step to removing the organisation altogether.

“The new Interim Building Code only includes elements necessary to meet the current legislative requirements and to retain existing exemptions. It cuts red tape by removing duplication of matters already covered by the Fair Work Act and other Commonwealth, state and territory laws,” Burke said at the time.

“The Fair Work Ombudsman will take on the role of enforcing the Fair Work Act in the building and construction industry, ensuring there won’t be a shortfall in workplace relations regulation within the industry. All litigation commenced by the Australian Building and Construction Commission will also be managed by the Fair Work Ombudsman.”

The interim building code that scopes out monitoring of security of payments for subcontractors came into effect two days after Burke’s announcement.

Handpicked for you

The ABCC has been a failure, with productivity in construction in decline under its regulation

The whole purpose of the Australian Building and Construction Commission was to lift productivity in the construction sector. So did it?

Albanese binning the construction watchdog like “committing economic self-harm”, MBA says

Master Builders Australia says small builders and tradies are suffering "a severe cost and cashflow crunch" and it is urging the major parties to make an economic plan for the flailing construction industry.