What is happening in Tasmania, South Australia, and the ACT?

Contractors in these three states must be making some good money! They must be getting paid all the time! Or so the statistics appear to be telling us.

When these states came into the Security of Payment fold in 2009, it seemed contractors in those states may at last have the same opportunities as those in others when it comes to fast adjudication. But nothing could be further from the truth. These three states are standouts for their lack of interest in something that has assisted settling payment disputes in other states for nearly 20 years.

It’s now been about seven years since the Act came into operation, so perhaps it’s worth seeing what contractors have done with it in these states. And the numbers tell us…not too much.

How many adjudication applications are being made? The latest figures we can get are as follows:

  • South Australia: 38 [2015-2016]
  • Tasmania: 25 [an approximation from ANA data as the government does not publish any statistics]
  • ACT: 30 [an approximation from ANA data as the government does not publish any statistics]

It is simply amazing that the Tasmanian and ACT state governments would go to the effort of legislating for Security of Payment and then do absolutely nothing to monitor or track the activity of the Act. It seems to me that the apathy of those states has translated into the take-up rate.

South Australia does record its activity, but that state has hardly been a fan of the Act and has done little to encourage contractors to use it. In fact, the Act was passed there in December, 2009, but was intentionally left on the shelf ‘unproclaimed’ for the default period of two years! This means the government went out of its way not to bring it in as soon as it was passed. In South Australia, if legislation is not proclaimed, it is automatically proclaimed two years after it is passed. So the Act there only came in in December 2011.

Let’s take a look at what’s going on in the states where contractors do use the Act. Here are the adjudication application statistics for the other states:

  • NSW: 794 [2015-2016]
  • Victoria: 333 [2014-2015]
  • Queensland: 638 [2015-2016]
  • WA: 225 [2015-2016]

It is clear that South Australia, Tasmania, and the ACT are far behind other states. And I am sure (as you are) that it is not because they’re all getting paid! In my view, it is a combination of a lack of government support, promotion, and awareness, and lack of enthusiasm by trade associations in those states to promote it to their members.

New South Wales was the first state to bring in the Act and there was wide support for it. Many trade associations became Authorised Nominating Authorities [ANAs] to process applications for their members. That is, there was a lot of promotion of the Act to a broad spectrum of contractors and subcontractors. The word got out. That is why both NSW and QLD were logging over 1,000 applications annually, a few years back.

The same volume of applications would be in play for Victoria if it weren’t hobbled by the ridiculous time restrictions placed on contractors under the changes made in 2007. Although this is well-known, the Victorian government does nothing about it.

By the time the Act came in for SA, TAS, and the ACT, the trade associations’ support for the Act had dimmed, with none wanting to be ANAs. In fact, most know little of the Act and do not make much of it to their members. Bottom line: the Act is not being used in these three states because contractors don’t know much, if anything, about it.

Sure, the relevant government departments provide all manner of information sheets and instructional videos on the government Security of Payment website page. But how many subbies get to these sites? There is a sad disconnect. Having made the effort to bring the Act into being, nothing is being done to make sure it is used. In Tasmania and the ACT, the government does not even bother to monitor or report on the activity and usage!

One hopes the recommendations and action coming out of the Murray Review will reinvigorate the use of the Act in these states, and in fact around the country. That will only succeed if the relevant government departments and trade associations make an effort to communicate the benefits of the Act on a wide front, and in an ongoing continuous manner.