Your selected location:
  1. Home
  2. /
  3. HHG Articles
  4. /
  5. HHG Construction Law Series Part 10: New Government Policy for Subcontractor Payments
17 Aug 2016

Security of payment for construction contractors is high on the agenda for the WA State Government which is rolling out a suite of reforms, including:

– the use of Project Bank Accounts (PBAs) to manage progress payment claims in Building Management and Works projects worth between $1.5m and $100m;

– extended time to apply for adjudication of a construction payment dispute from the current 28 days to a proposed 90 days;

– a code of conduct for government contractors; and

– other possible reforms, including a government-run education program for construction industry stakeholders on contractors’ rights and obligations under the Construction Contracts Act 2004.

On 30 September 2016, PBAs will start being used across all WA-based government projects worth $1.5m to $100m. Originating in NSW, the concept involves a principal paying a head contractor’s progress payments into a special-purpose account administered by a bank as trustee for both head contractor and all subcontractors. Whilst the head contractor remains solvent, the trustee will pay out both the head contractor’s and subcontractors’ payment claims from that fund. In the event of the head contractor’s insolvency, subcontractors will get paid in preference to the head contractor’s other creditors. The objective is to secure payments to subcontractors that would otherwise go to an insolvent head contractor’s secured and other priority creditors.

The rationale for limiting the use of PBA to projects worth $1.5m – $100m is:

– at the lower end, contractors engaged in works under $1.5m are more likely to experience cash flow difficulties if the payments that would otherwise be available to help fund other works were instead tied up in a PBA; and

at the upper end, the cash flow issues that PBAs help manage are considered to be less likely to occur, even at subcontractor level, where the value exceeds $100m.

However widespread or limited their use may be, PBAs, by themselves, are unlikely to be enough to deal with the effects of other undesirable practices in the construction industry such as:

– Inappropriate levels and kinds of risk being pushed down the line to subcontractors who are least able to manage it; and

– inadequate planning and project management causing delays and budget blow-outs (at a cost to the principal and ultimately, the public at large).

The proposed code of conduct and government education program may go some way towards combatting such practices. Only time will tell. 

 This is general information only, and does not constitute specific legal advice. If you would like further information in relation to this matter or other legal matters please contact our office on Freecall 1800 609 945 or email us now.

*This is general information only, and does not constitute specific legal advice. Please consult one of our experienced Legal Team for specific advice relevant to your situation.

Supporting Western Australians for more than 100 years

"Always fast and thorough service. Thank you"


My circumstances at the time I made contact with HHG were dire following my argument being rejected by two no win no fee firms. Following my initial meeting with HHG's employment law team I was left feeling extremely positive by the response and concern shown by HHG in regards to their support of my argument along with their preparedness to pursue an outcome on my behalf.

I accept the fact that nobody really wins in these cases (mental health/ workplace) however the end result was what would be considered most favourable and far in excess of what would have been achieved had I not sought the advice from HHG.

I have no hesitation in recommending HHG to anyone caught up in the messy circumstances I found myself in at the time.

Great advice and five-star commitment to their client!!"


"Thank you for such great assistance with the transaction of Flying Domestics on behalf of Lorna Good. It has been such a pleasure to work with the HHG Legal Group and I look forward to working with you in the future."


"Simon Creek and his team were at all times empathic, professional and confident.  My matter needed to be addressed within a pressing time frame, and their availability at short notice and contact after hours was much appreciated.  It caused me considerable stress, but having such a thoroughly reliable and competent team to call on helped me to feel in control. Although I hope not to need their services again in future, I would be confident in doing so!"


"A good outcome is what we can expect.  A great outcome is a sign of a company which does the very best for their clients. A very big thank you to Daniel Morris for showing empathy towards my small and much needed legal action.

To HHG Legal Group, thank you for a great outcome.  I would recommend your company to anyone seeking legal services."


"Your support this morning was amazingly kind, not to mention your totally reassuring competence, knowledge and wisdom that you used on my behalf.  It was extremely reassuring to have your knowledgeable support, and I particularly appreciated your real and obvious kindness to me. It means so much at a very difficult time. I'm so grateful to you."

Family Law Client

"Janene was very professional and we established a good rapport quickly. The subject of death and wills can be quite confronting to deal with, however, Janene's approach was soft and accommodating."


"A big thank you to HHG for their professional service, continued support, and wide range of legal knowledge. Our clients have given us nothing but kind words regarding HHG Legal Group and so we have no hesitation in referring and recommending Simon Creek and HHG Legal Group for their outstanding services and legal expertise."


"Simon is a friendly and practical legal advisor. I have received great feedback from the clients I have referred to him and his team at HHG Legal Group."


"Over the last few years, I have been impressed by Simon’s legal ability, management skills, entrepreneurial spirit, personal integrity and people skills. He appears to be that rare breed of lawyer – both knowledgeable and commercial."


"Our family has been a client of HHG Legal Group over many years.  Business has included drawing up of wills for three generations and preparing of probate for my father in law. I would have no hesitation in recommending HHG Legal Group to anyone requiring such services."


"You should be congratulated for the manner in which your staff address clients and we found our dealings with your company, once again a very pleasant experience and we would like to truly thank you for your efforts."

Steve and Jane

"HHG Legal were absolutely fantastic. Extremely responsive and brought calm to our chaotic family situation through their knowledge and caring attitude. Extremely professional from our very first contact with them and they expertly guided our family though the required legal process over almost a 12 month period."


"Fantastic team! They really care about their client. Tim Colcutt is a 'go that extra mile' guy who gives his client his all. I can't recommend HHG and Tim enough."


"I had a fantastic lawyer in Matthew Lilly. He helped me out a great deal with good, sound advice in a friendly, professional manner. First class, thanks Matthew"


"Marine Plant Systems has been working with HHG Legal Group for a few years now and they continually provide first-class service. Their professional advice has been invaluable to our company."


"We were kept up to date at all times. Pricing was always updated over the time period so we remained "in budget". Personal access to someone whenever I had questions. All in all a great experience without too much fuss."


"Good service you can count on."


"HHG Legal Group has provided outstanding support as I have taken the journey of buying a business, their professionalism is beyond reproach. Their assistance throughout the Due Diligence process has been invaluable, I would fully recommend them."


"Very friendly and efficient service - what a pleasure working with Matthew."


"I highly recommend Daniel from HHG Lawyer in Mandurah. When dealing with a complicated legal property matter recently I was extremely impressed by Daniel's honesty and integrity and the legal advice I received. I am very happy with the service from HHG Legal."


Select your location:

Please select your nearest office location so we can show you the most relevant information.