Juliana ADDISON (Wendouree) (10:13): I rise today to provide further comments on the report from the Environment and Planning Committee’s inquiry into employers and contractors who refuse to pay their subcontractors for completed works. This really is at the heart of fairness and what our country is about – that a fair day’s work deserves a fair day’s pay. What we have found is that that does not happen in Victoria, that for far too many people, for far too many families, a fair day’s work does not equal a fair day’s pay.

This report was tabled in the last sitting week of 2023, and it is only the second opportunity for me to discuss the significance of the report’s findings and the importance of the recommendations. But first and foremost, as so many of us who work on committees know, we must acknowledge the incredible committee secretariat for their hard work that they do to support the committee as well as gather the evidence and produce this report. To Igor Dosen, Kieran Crowe, Samantha Leahy and Helen Ross-Soden, your work is so appreciated. For the quality of your work and the support that you give your committee we are all indebted to you. Thank you so much.

The terms of reference for our committee for this inquiry were to really examine the reasons and the nature of the refusal to pay subcontractors for completed work. The report that has been produced is a quality report. It does a really deep dive into the poor payment practices for subcontractors in the Victorian construction industry, producing four important findings as well as 28 very significant recommendations on how to address the scourge of non-payment, incomplete payment and late payment.

The reason this report is so good is because of the committee members who did the work. I am looking over to my deputy chair right now, the member for Morwell. Working collegially with him as well as the members for Bass, Croydon, Monbulk, Nepean and Ripon and our newest member, the member for Warrandyte, who has replaced the member for Nepean, has been really, really great, because this topic is really important. It is important to people who live in every electorate across our state. It was not a niche report, it was a really, really significant report, and I really want to thank all the committee members for their genuine interest and the collegial approach that we had. We all were looking for the very best outcomes for our subcontractors, because we all shared the view that this was about fairness, so I really, really thank them. I am really looking forward to getting out and rolling up our sleeves for our next inquiry, which is about securing Victoria’s food supply. We have got really great terms of reference, and we are going to have a red-hot go and do that.

The construction industry in Victoria is one of our largest industries in terms of its contribution to the economy and the number of people it employs. One of the features of the Victorian construction industry is its hierarchy – it is very hierarchical in nature, particularly for commercial and civil projects. Contracting for these projects resembles a pyramid, with a project tenderer at the top – sort of the principal – followed by head contractors and then subcontractors, who undertake much of the building work.

It is these subcontractors who typically suffer from poor payment practices, which affects not only their employees, their apprentices and the people who work in these very often small and sometimes medium enterprises but also the families and local economies. If you have got tradies and subcontractors working in a small community or in regional Victoria and they are not getting paid, that has got flow-on effects. It has got flow-on effects for local businesses and it has got flow-on effects for suppliers, and we want this practice to stop.

We know that this is not unique to the Victorian construction sector and that other Australian jurisdictions have also introduced security-of-payment legislation to address these issues. The poor payment practices occur in the sector for several reasons, but a really important reason is the imbalance of power between head contractors and subcontractors and the prevalence of undercapitalised businesses and thin profit margins. We heard that head contractors use money that should be earmarked for subcontractors as operating capital for other projects and business expenses. I am going to take the opportunity to talk on this report more, because I have run out of time and I am just skimming the surface.

You can take a look at more of my speeches to Parliament here.