The Federal Minister for Employment, the Hon. Michaelia Cash, has announced a review into security of payment legislation in the building and construction industry. Mr John Murray AM has been appointed to conduct the review.

The terms of reference for the Review involve:

  1. examination of security of payment legislation of all jurisdictions to identify areas of best practice for the construction industry;
  2. consideration of recently conducted reviews and inquiries in relation to security of payment, including the December 2015 report by the Senate Economic References Committee on insolvency in the Australian construction industry and the draft legislation developed by the 2003 Cole Royal Commission into the Building and Construction Industry;
  3. consultation with business, governments, unions and interested parties and the Security of Payments Working Group, the new working group established to monitor the impact of the activities of the reinstated Australian Building and Construction Commission, upon compliance with security of payment legislation;
  4. consideration of contractual terms that restrict contractors in the construction industry from obtaining payments for work that has been completed; and
  5. consideration of security of payment models other than those currently in force, including the model operating in Queensland prior to 2014.

The Review is to provide a progress report to the Minister for Employment by 30 September 2017 with the final report, with recommendations, provided to the Minister by no later than 31 December 2017.

Notably, in announcing the Review, the Minister has highlighted the lack of consistent security of payment legislation across state and territory jurisdictions. A close consideration of the benefits of harmonisation of security of payment legislation seems to be on the agenda.

A link to the media release and terms of reference follows can be found here.