Western Australia’s Parliament has passed new payment protection laws for subcontractors, giving greater protections against insolvency.
The Building and Construction Industry (Security of Payment) Amendment Bill strengthens WA’s nation-leading framework designed to protect subcontractors from the cascading impacts of head contractor insolvency.
Under the reforms, progress payments for state government building projects valued at more than AU$1.5 million will be held within dedicated construction trusts.
Once operational, the construction trust scheme will replace the Project Bank Accounts that have operated across major state government works since 2019. The transition aims to slash administrative red tape while delivering increased certainty, clarity and cashflow security for tradespeople and local businesses building critical infrastructure, schools, hospitals and housing across the state.
Commerce Minister Tony Buti highlighted the pivotal role subcontractors play in delivering major public projects, noting that workers deserve complete confidence that their earned revenue is protected if a head contractor faces financial collapse.
“These laws cement Western Australia’s nation-leading position on subcontractor payment protection, with stronger safeguards when insolvency strikes,” Buti said.
He explained that the new construction trusts provide clearer, more efficient payment arrangements while reinforcing insolvency safeguards across the industry.
Finance Minister David Michael said the reforms reinforce the government’s commitment to supporting local small and medium enterprises.
He noted that head contractors will gain greater operational flexibility under the new scheme, as trust accounts can now be established with any recognised financial institution rather than being tied to restricted banking arrangements.
State authorities plan to issue detailed guidance to industry stakeholders and government agencies before the new requirements formally apply to public sector projects, ensuring all parties thoroughly understand their rights and statutory obligations.
The state government confirmed that these legislative changes solidify Western Australia’s benchmark position in payment protection reform, ensuring subcontractors who deliver vital public works receive guaranteed payment for their labour.