The 140-clause Security of Payment Bill 2021 which will replace the Construction Contracts Act 2004 (WA) has passed both Houses of Parliament and received Royal Assent on 25 June, 2021. The following papers were also tabled as part of its deliberation in the Upper House:
- Cost benefit analysis of SOP reform, report by Deloitte Access Economics, July 14, 2020
- Consultation on the SOP Bill 2021 to date as of June 15, 2021
- Summary of changes made to SOP Bill 2021, updated on June 15, 2021.
It is proposed the provisions will commence 12 months after Royal Assent, with the retention trust provisions to begin stepping in at 18 months. Half of the $2.9 million allocated by the 2020-21 WA Budget will cover the cost of new investigators to implement and enforce the bill’s compliance and service delivery provisions. The other half will be for education initiatives and system changes such as training of adjudicators, advertising changes and a face-to-face road show.
An extra $6.9 million in funding has also now been allocated, taking the total implementation funding over four years to $9.8 million.
CME raised concerns with some aspects of the legislation prior to it being tabled in Parliament and will continue to engage with the government and the Department of Mines Industry Regulation and Safety on the development of supporting regulations.
Update on the Payment Times Reporting Scheme
Responsibility for the scheme has been transferred to Treasury, with the 2021-22 Federal Budget allocating an additional $16 million for its effective operation. Depending on your company’s financial year for tax purposes, reports are required to be submitted to the regulator as early as September 30, 2021. Failure to comply will have substantial financial penalties.
Given the legal obligations of reporting payment times and practices, the Federal Government recommends professional advice is obtained to ensure compliance. PwC for example recorded its webcast held on 26 May 2021, which had interest from ~1,000 attendees. A short two-page summary is also accessible here.
If you would like to reach out to one of the Perth-based contacts on the proposed tool to automate compliance, please ask Linh Nguyen, Policy Adviser – Industry Competitiveness at L.Nguyen@cmewa.com.
