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Subcontractors get watchdog for State contracts

The treatment of subcontractors and small businesses on State Government projects will be policed by the Small Business Commissioner under new legislation tabled in State Parliament yesterday.

Small Business Minister Paul Papalia said the focus was on the construction industry but the Commissioner could also investigate other sectors, such as retail, where small businesses were being hurt.

The Small Business Development Corporation will set up an investigations unit aimed at corporate and government behaviour and unfair practices.

The unit will conduct random inquires as well as targeted investigations based on tips from other agencies and complaints from subcontractors.

The Commissioner will be able to compel head contractors for State Government projects to prove they have paid their subcontractors and recommend potential sanctions and improvements to policy.

“The focus of the corporation is to maintain strong, positive working relationships for business in WA,” Mr Papalia said.

“This Bill represents decades of work from industry stakeholders and the Small Business Development Corporation who have pushed relentlessly for justice for subcontractors.”

In December a report by barrister John Fiocco found a power imbalance between head contractors and subcontractors and the “contractual chain” of money passing from top to bottom created greater risk for those at the bottom. It came after a series of high-profile collapses of building companies last year, including Cooper and Oxley, York Civil and ArchiApps.

Attorney-General John Quigley pledged in February to introduce legislation this year to implement Fiocco’s recommendations of a 15-day pay or explain-why-not deadline, cascading statutory trusts to protect payments down the food chain, and “an efficient and quick adjudication system”.

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