The Australian Constructors Association (ACA) has published a new paper on payment practices in the construction industry – Credit where credit’s due—Improving security of payment and liquidity in the construction industry.
The paper highlights the need to change payment practices, noting the increase in construction insolvencies and, importantly, proposes solutions to improve the health of the industry.
Improving payment frequency, simplifying claims processes and increasing bid cost reimbursements are some of the solutions put forward by the ACA, along with a call for the Federal Government to standardise security of payment regulations across the states.
ACA CEO Jon Davies said:
“Prompt and fair payment is essential for the health of the industry, starting with advance payments. Advance payment should be provided for site mobilisation costs and long lead, high value procurement items to avoid the contractor commencing in a cash negative position and reduce the risk of material price escalation.”