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Submission to Policy and Strategy, Better Regulation Division Department of Customer Service Draft Building and Construction Industry Security of Payment Regulation 2020 24 July 2020
Submission to Policy and Strategy, Better Regulation Division Department of Customer Service
Draft Building and Construction Industry Security of Payment Regulation 2020
24 July 2020
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ABOUT THE HOUSING INDUSTRY ASSOCIATION ...........................................................................................III
1. INTRODUCTION .............................................................................................................................................4
2. REGULATORY IMPACT STATEMENT (RIS) ................................................................................................5
3. THE BUSINESS OF RESIDENTIAL CONSTRUCTION .................................................................................6
3.1 THE RESIDENTIAL BUILDING INDUSTRY ........................................................................................................6
4. RESPONSE TO THE PROPOSED AMENDMENTS ......................................................................................8
4.1 REDUCTION OF THRESHOLD FOR RETENTION MONEY TRUST REQUIREMENTS ...............................................8 4.2 REMOVAL OF THE ANNUAL REPORTING REQUIREMENTS FOR TRUST ACCOUNTS ..............................................9 4.3 THE EXEMPTION FOR OWNER OCCUPIER CONSTRUCTION CONTRACTS ...........................................................9 4.4 TRUST ACCOUNT REQUIREMENTS RECORDS AND INFORMATION ................................................................ 10 4.5 SETTING OF MINIMUM ELIGIBILITY REQUIREMENTS AND QUALIFICATIONS FOR ADJUDICATORS ....................... 10
SUMMARY RESPONSES TO QUESTIONS POSED IN THE RIS ...................................................................... 12
Housing Industry Association contacts: David Bare Guy Noble Executive Director Manager Workplace Services Housing Industry Association Housing Industry Association 4 Byfield Street 4 Byfield Street Macquarie Park Macquarie Park Phone: 9978 3333 Phone: 9978 3333 Email: [email protected] Email: [email protected]
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ABOUT THE HOUSING INDUSTRY ASSOCIATION
The Housing Industry Association (HIA) is Australia’s only national industry association representing
the interests of the residential building industry, including new home builders, renovators, trade
contractors, land developers, related building professionals, and suppliers and manufacturers of
building products.
As the voice of the industry, HIA represents some 60,000 member businesses throughout Australia.
The residential building industry includes land development, detached home construction, home
renovations, low/medium-density housing, high-rise apartment buildings and building product
manufacturing.
HIA members comprise a diversity of residential builders, including the Housing 100 volume builders,
small to medium builders and renovators, residential developers, trade contractors, major building
product manufacturers and suppliers and consultants to the industry. HIA members construct over 85
per cent of the nation’s new building stock.
HIA exists to service the businesses it represents, lobby for the best possible business environment for
the building industry and to encourage a responsible and quality driven, affordable residential building
development industry. HIA’s mission is to:
“promote policies and provide services which enhance our members’ business practices, products and profitability, consistent with the highest standards of professional and commercial conduct.”
The residential building industry is one of Australia’s most dynamic, innovative and efficient service
industries and is a key driver of the Australian economy. The residential building industry has a wide
reach into manufacturing, supply, and retail sectors.
The aggregate residential industry contribution to the Australian economy is over $150 billion per
annum, with over one million employees in building and construction, tens of thousands of small
businesses, and over 200,000 sub-contractors reliant on the industry for their livelihood.
HIA develops and advocates policy on behalf of members to further advance new home building and
renovating, enabling members to provide affordable and appropriate housing to the growing Australian
population. New policy is generated through a grassroots process that starts with local and regional
committees before progressing to the National Policy Congress by which time it has passed through
almost 1,000 sets of hands.
Policy development is supported by an ongoing process of collecting and analysing data, forecasting,
and providing industry data and insights for members, the general public and on a contract basis.
The association operates offices in 23 centres around the nation providing a wide range of advocacy,
business support including services and products to members, technical and compliance advice,
training services, contracts and stationery, industry awards for excellence, and member only discounts
on goods and services.
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1. INTRODUCTION
On 26 June 2020 a draft Building and Construction Industry Security of Payment Regulation 2020 (the Draft Regulation) was released for comment. The existing Building and Construction Industry Security of Payment Regulation 2008 (the 2008 Regulation) was originally due to be automatically repealed under the Subordinate Legislation Act 1989 on 1 September 2020, but due to the uncertainty caused by the Covid-19 pandemic this date was extended for a further 12 months. In addition to the Draft Regulation an accompanying Regulatory Impact Statement (RIS) and draft CPD Guidelines for Adjudicators were also released for public consultation. The RIS recommends that the Draft Regulation take effect on 1 September 2020 reversing the 25 March extension of the 2008 Regulation. HIA does not support this approach. It will simply result in placing more businesses under administrative strain at a time when everything else the Government is doing is aimed at supporting businesses in coping with the economic uncertainties arising from the pandemic. The amendments will impose an administrative burden on businesses who have never previously had to take account of retention trust legal obligations. Further, over the past few weeks there has been a spike of cases of community transmission of Covid-19. This, HIA would argue, should be considered a good reason for maintaining the status quo at the present time. There is also no justification in the RIS for the changes, merely the assertion that ‘it is considered in the best interest of the industry to proceed with the proposed Regulation as soon as possible to enact these vital changes.’ HIA is concerned about the lack of detail contained in the RIS. The RIS is drafted in generalised terms and fails to assess the cost, benefits or impacts of the regulations in any substantive or forensic sense. A further impact study is therefore necessary to properly consider and assess the matters contained in the Draft Regulations. In 2018 and into 2019 the Regulator and interested stakeholders engaged in a consultation process on a range of issues around reforms to security of payment in the building and construction industry. HIA made a number of submissions during this period, most recently in respect of the implementation of the security of payment reforms. HIA relies on those previous submissions. The amendments to the Building and Construction Security of Payment Act 1999 (the Act) ultimately commenced in October 2019. It was clear at that time that in addition to these substantive reforms other minor reforms were being considered and that they could be introduced through further amendments to the Regulation after discussions that were to occur with interested stakeholders. One of the key areas of concern to HIA, and about which HIA apprehended further discussion and consultation was going to occur, is the application of the rapid adjudication process and the exemption applying to owner occupier construction contracts. Feedback as to whether or not the exemption should be maintained is only now being sought. This is disappointing. It is also disappointing that a reduction in the project value threshold is again being proposed. Submissions were canvased on this proposal during the 2018 consultations. HIA opposed the reduction then and continues to oppose the reduction now for the same reasons as before. A similar observation can be made in respect of the obligation to provide retention money trust records to subcontractors.
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The main amendments now being proposed in summary seek:
A reduction of the project value threshold from at least $20 million to at least $10 million for retention money trust account requirements,
Removal of the annual reporting requirements for trust accounts and its replacement with a range of alternative reporting requirements,
To introduce an obligation to provide retention money trust account records to subcontractors whose money is held in trust and
To set minimum eligibility requirements and qualifications for adjudicators. HIA provides this submission in response to the proposed amendments.
2. REGULATORY IMPACT STATEMENT (RIS)
Under the Subordinate Legislation Act 1989 the basic role of a RIS is to assess both the direct and indirect costs and benefits, including economic and social cost and benefits, of the proposed subordinate legislation in light of the objectives of the regulations. In HIA’s view the RIS associated with the Draft Regulation fails to fulfil this function. The RIS presents primarily as a discussion paper. Whilst consultation is welcome, transparency as to those matters of consultation is paramount. A RIS should present as such and if feedback is invited on specific aspects of the regulations the appropriate way to do this is through a discussion paper separate and distinct from a formal RIS. As noted above, HIA is also of the view that the RIS does not comply with the requirements of the Subordinate Legislation Act 1989 and does not fulfil the basic role of a RIS, that is to assess both the direct and indirect the costs and benefits, including economic and social cost and benefits of the proposed subordinate legislation. The RIS references the NSW Productivity Commission’s Guide to Better Regulation. The Guide to Better Regulation contains a Better Regulation Regulatory Impact Assessment Checklist which lists a number of principles that should be considered when conducting an impact analysis and whether all the costs and benefits of the options have been adequately considered and evaluated. They include the following questions which should be satisfactorily addressed:
Have the direct and indirect impacts of the proposed regulation for business, community and government … been considered and quantified.
Have quantitative, as well as qualitative, impacts been considered? Have benefits as well as costs been identified, detailed and measured for each viable option?
Where additional regulation is being proposed a question posed is, ‘Has the impact of previous regulation been assessed and evaluated?’ The ultimate question to be addressed is not whether the Draft Regulations should be made at all, the question is whether on an assessment of the costs, benefits and impact of the regulations, those regulations should be made in the draft form issued. The RIS has clearly failed to meet the requirements of the Guide to Better Regulation in a number of ways. There has been no cost assessment of what the new requirements will actually cost and no interrogation into the increased administrative burden that will inevitably arise from the changes. Those projects over $10M may have scores of sub-contractors for which reports will have to be prepared.
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3. THE BUSINESS OF RESIDENTIAL CONSTRUCTION
3.1 THE RESIDENTIAL BUILDING INDUSTRY
HIA has outlined in previous submissions how the residential building industry differs significantly from the commercial and civil construction industries. Those differences, which need to be borne in mind, are traversed below. Firstly, unlike the commercial and civil construction sectors, the residential building industry is principally comprised of small businesses and self-employed independent contractors. The HoustonKemp Report on the Financial impacts of statutory trusts in the building and construction industry prepared for the Department of Finance, Services and Innovation and published in April 2019, states the following on page 3:
The construction industry in NSW is characterised by large numbers of small and medium sized businesses. At the end of 2017, there were 119,000 construction businesses in NSW. Over 61,000 of these businesses were sole traders while the remainder predominately consisted of small businesses employing between one and 19 employees. Only two per cent of businesses in the sector employ 20 or more people.
With such a high number of small businesses, this sector is particularly vulnerable to the negative impact of additional red tape and government regulation.
Secondly, the terms and conditions for commercial builders and those engaging in government contracts are significantly different from the terms and conditions a builder faces when working on a residential building project. Commercial projects and government works are generally characterised by:
a tendering process that often forces negative margins with the hope that future variations will cover the shortfall;
the use of retentions;
longer payments terms (up to between 45 and 60 days compared to 21 days in residential);
limitations on a builder’s ability to select subcontractors;
contract administration by a superintendent/ architect;
significant amounts for liquidated damages; and
long defects liability periods. Such elements are not present in the residential building environment, which faces equally as challenging yet different factors such as:
the homeowner, whose significant emotional and financial investment places additional pressures on the builder and trade contractors;
prescriptive statutory contractual arrangements;
quasi regulation of payment terms through the involvement of financial institutions;
ineffective, time consuming and often litigious methods of recouping late payments;
demanding terms of trade from suppliers; and
significant exposure to uncontrollable events such as inclement weather and fluctuations in the supply of building materials.
Thirdly, the residential building industry is heavily regulated when compared to other building sectors.
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Home builders must manage a complex web of national, state and local laws, regulations and codes. These range from planning, design, environment, health and safety, to local authority inspection and certification and a multitude of building, electrical, mechanical and plumbing processes. The businesses must also comply with a legislative framework that spans licencing, ATO contractor reporting requirements, dispute resolution, builders warranty obligations and contractual requirements. The new statutory duty of care provisions in the Design and Building Practitioners Act 2020 can now be added to the legislative framework. Fourthly, the cyclical nature of the residential building industry is relevant to the operation of security of payments laws and the relationships between contracting parties. The high cost and highly regulated nature of the industry together with the small business profile of firms also means that they are especially susceptible to economic cycles and changes in government policies and regulation. Financial failure for some firms will be an unavoidable consequence of the competitive forces of Australia’s market economy. It remains to be seen what the effect of the Covid-19 pandemic will be on the residential construction industry. There are also inherent uncertainties in contract prices which arise from the fact that works are required to be priced before construction commences and are based on technical, financial and workforce assumptions, together with material costs/availability, access to site, timeframes, weather, statutory approvals and delays. Finally, a consistent challenge for builders is maintaining cash flow under a negative cash flow model. Whilst a trade contractor is typically paid for work in arrears and must finance this cost, the same holds true for builders who must ‘finance’ an owner’s costs. Subcontractors and suppliers will naturally not wait for the substantial client to builder payment late in the duration of the job and often builders must source other financing arrangements to keep cash ‘flowing’. Builders in the residential building industry ordinarily fund their works by way of debt financing. Revenue on the other hand is derived from client payments which are highly regulated and paid after completion of work and after the building costs are incurred. Yet, the activities undertaken are subject to a high level of risk. The reliance of builders on cash flow to manage operations and cyclical conditions exposes them to an even greater extent in the event of non-payment by a client. These factors are amongst those that may contribute to the high levels of insolvencies in the construction industry. However, ASIC data does not disaggregate between large public infrastructure projects nor the civil, commercial and residential sectors and as such fails to paint an accurate picture of the level of insolvency in the residential building industry. HIA acknowledges in broad terms that high rates of insolvency are a poor outcome for productivity in any industry. While an effective and efficient statutory framework is required to help business and creditors deal with the impact of insolvency, the statutory framework must not seek to impose unnecessary regulation that makes it even more difficult for businesses to enter the market and grow.
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4. RESPONSE TO THE PROPOSED AMENDMENTS
4.1 REDUCTION OF THRESHOLD FOR RETENTION MONEY TRUST REQUIREMENTS
It remains HIA’s position that retention funds should not apply to residential construction projects. As noted, the 2008 Regulation currently requires head contractors to pay retention monies into a trust account for construction projects valued over $20 million. This proposed provision will see a reduction in value to projects of over $10 million. HIA opposes the proposed amendment contained in clause 6, of reducing the amount of the head contractor’s construction contract with the principal to a value of at least $10 million. As with previous consultations, again no analysis or cost assessment has been carried out and presented to support any reduction and no evidence has been presented regarding the operation of the current model to justify this change. HIA reiterates its opposition to the imposition of any form of trust arrangement in the construction industry and specifically in the residential building industry. HIA has consistently expressed this view since the 2012 Collins Inquiry. The imposition of trust arrangements will not stop insolvencies or guarantee payments to subcontractors. They will however impose additional costs for residential building work that will impact housing affordability. Based on the information provided in the HoustonKemp report (which is itself taken from the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) working paper1) an additional 42 hours of administrative work a year will be required for the vast majority of business to comply with the newly imposed obligations. HousonKemp estimate2 the cost per hour of bookkeeping to be $40 per hour. This reflects market rates for bookkeeping services, which can range between $30 per hour to $50 per hour depending on the complexity of the task. This would equate to an average of $1,680 per annum. The maintenance of cash flow for builders in the residential building industry proves to be a constant challenge given the prevalence in the industry of a negative cash flow model. Whilst a trade contractor is typically paid for work in arrears and must finance this cost, this is also the case for builders who are required to essentially ‘finance’ an owner’s costs at least in the short term. Builders in the residential building industry typically fund their projects by way of debt financing. Revenue is derived from client payments which occurs in a highly regulated system and cannot be received until after the completion of work and the incurrence of building costs. HIA again takes the opportunity to remind the Government that relevant amendments made to the NSW Building and Construction Industry Security of Payments Act 1999 (the Act) in 2013 (commencing in 2014) in response to the Collins Inquiries recommendations expressly excluded the residential building Industry3. The Minister, in his second reading speech noted that:
In response to concerns about the potential impact of the reforms in this bill on small business
in the residential sector, upon becoming Minister for Finance and Services in August this year
I undertook to conduct additional consultation with the industry. As a result of this
consultation, the bill provides a limited exemption targeting small businesses operating in the
1 Australian Small Business and Family Enterprise Ombudsman, Cascading deemed statutory trusts in the construction sector, November
2018 2 Page 12
3 Building and Construction Industry Security of Payment Amendment Act 2013
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residential sector...This means that the amendments will not apply to a residential contract
that is connected to the contract between the consumer and head contractor—referred to in
the bill as the “main contract”.
HIA continues to strongly advance the position that the residential building industry represents a distinct and unique component of the construction industry and retention funds should be excluded from this sector of the construction industry. This position on exemption for the residential building industry was also proposed in the HoustonKemp Report4, provided the homeowner intends to reside in the completed dwelling. Providing an exemption for the residential building industry was also what the practical effect of a recommendation made in the ASBFEO working paper referred to above would mean. Although the ASBFEO on balance supported the introduction of statutory trusts in the construction industry, the following was part of their recommendations:
While we support cascading deemed statutory trusts for commercial projects with a value of at least $1 million, consideration should be given to a higher project value to avoid capture of the private residential housing sector.
Imposing statutory trusts on very small business is not warranted given their limited resources. We recommend setting a floor to exclude low value sub-contracts within a project. Consideration should be given to a floor value between $100,000–200,000 to exclude small business operators
4.2 REMOVAL OF THE ANNUAL REPORTING REQUIREMENTS FOR TRUST ACCOUNTS
Consistent with its longstanding position, HIA supports amending the Regulation to remove the annual reporting requirements in clause 16 of the 2008 Regulation. This will remove the trustee’s costs associated with conducting reviews of accounts, which according to the RIS will provide an estimated saving of between $3,000 to $10,000 in compliance costs.
4.3 THE EXEMPTION FOR OWNER OCCUPIER CONSTRUCTION CONTRACTS
It was anticipated during the 2018 consultation on the proposed amendments that consultation on the exemption for owner occupier construction contracts was going to occur prior to the publication of any draft regulation. It is disappointing that no opportunity to consult was provided. The first time that stakeholders to get view such proposed amendment should not be when it is the form of regulation. HIA’s long held policy position on security of payment laws is that they ‘should cover all building work contracts, including payments by domestic clients to builders. If a party in a contract chain is subject to a mandatory or implied condition or right under legislation, that condition or right, as a matter of commercial risk management, must be reflected throughout the entire contract chain’. Builders are prevented from using the rapid adjudication process against homeowners despite subcontractors on the same job being able to avail themselves of the remedy against the builder. As noted in previous submissions, this is unfair and financially disproportionate to the detriment of the builder. During the consultation into the Review of Security of Payment Laws and as mentioned in the final report of the national Review of Security of Payment Laws (the Murray Report), HIA argued that the adjudication process for domestic construction could operate under the same rapid adjudication scheme that operates in the commercial sector of the construction industry.
4 Page 26
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HIA further submitted that amendments could be made to incorporate some additional consumer protections for the home-owner whilst retaining the key features of the existing security of payment schemes. The example of the rapid adjudication system in Tasmania was provided where home owners have an additional 10 days to respond to a builder’s payment claim and where there is a second opportunity to respond before the matter is adjudicated. The Murray Report contains a particularly apposite piece of commentary on this issue5:
There seems something inherently incongruous as to how a legislative scheme that has
been designed to improve the payment practices within the industry will only permit one
group of contractors to avail themselves of the benefits of the legislation, and yet on the
same building project, another type of contractor would be deliberately shut out from the
process. True, the relationship between a residential builder and a ‘mum-and-dad’ owner-
occupier is of a different nature to that of a builder and subcontractor, but the fact remains
that residential builders face similar cash flow issues to subcontractors when they do not
receive prompt payment for building work carried out.
Ultimately, it was recommended that ‘The legislation should apply to the residential housing sector so as to enable a residential contractor/builder to make a progress payment claim against an owner-occupier.’6
4.4 TRUST ACCOUNT REQUIREMENTS RECORDS AND INFORMATION
Proposed cl 8.3 replicates the provisions currently in cl 6.2 of the 2008 Regulation. This is appropriate. The Regulation allows for the establishment of retention money trust accounts in three different forms. Those forms are on the basis of (a) a separate account for each particular subcontractor, (b) a separate account for each particular construction contract of the head contractor, and (c) a separate account for all construction accounts of the head contractor. Whilst this clause allows a certain freedom in administrative choice for the head contractor it is potentially undermined by cl 16 which is overly prescriptive and somewhat at odds with cl 8.3. As noted above, there has been no cost assessment of what the new requirements will actually cost and no interrogation into the increased administrative burden that will inevitably arise from the changes. Projects over $10M frequently have scores of sub-contractors for which reports will then have to be prepared.
4.5 SETTING OF MINIMUM ELIGIBILITY REQUIREMENTS AND QUALIFICATIONS FOR ADJUDICATORS
The proposed new part 3 of the Draft Regulation contains a number of provisions dealing the eligibility requirements for adjudicators. In short, to be able to be an adjudicator a person must have a degree or diploma in architecture, building surveying, quantity surveying, building and construction, construction management, engineering or law from a university or tertiary institution. They will also need to have at least 5 years’ experience in the management and administration of construction contracts, or 5 years’ experience in dispute resolution in connection with construction contracts. Alternatively, the Draft Regulation also allows a person to be eligible to be an adjudicator if they have at least 10 years’ experience in the management of construction contracts or the resolution of disputes in connection with construction contracts.
5 Review of Security of Payment Laws page 126
6 Ibid, Recommendation 12
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In addition, to be and remain eligible a person must have undertaken the required continuing professional development (CPD). Draft Guidelines for adjudicators continuing professional development have also been released for comment. HIA has reviewed the Draft Guidelines. The compulsory topics (a) Legal principles and concepts, (b) Practice and procedure, and (c) Ethics are appropriate. So too are the number of units and the timeframe in which to undertake the continuing professional development. The examples in the Draft Guidelines are useful, as are those relating to the CPD activities and the Record Template. The language used in the RIS surrounding the CPD requirements seems to suggest that the CPD scheme once implemented will have the effect of raising the standards and competency of adjudicators and consequently the quality of their decisions. However, there is no evidence in the RIS that this is going to improve the adjudications and result in fewer appeals of the adjudicated decisions. It was recognised in the Murray Report and the Murray Model of Rapid Adjudication in terms of a ‘right to review’ was made within the context of the East Coast Model where the ‘quick and dirty’ nature of rapid adjudication means that decisions of adjudicators are naturally susceptible to errors of law or fact. In fact across all the East Coast Model jurisdictions, nearly four out of five challenges result in the adjudicator's determination being overturned. 7 It should be noted that in 2014 an IPART review into licensing concluded about the New South Wales scheme, ‘CPD neither guarantees that learning takes place nor does it guarantee that these ‘learnings’ will be translated into changes that improve practice within the industry.’ The CPD courses that will need to be undertaken have also not been costed in the RIS. It would be fair to assume that the costs associated with undertaking CPD will flow on to increased costs for adjudications themselves. We do not know. The analysis was not done. HIA views the transitional period for the commencement of CPD as unnecessary. The obligation to undertake CPD operates progressively. For this reason their commencement should be aligned with the commencement date of the other reforms. It is HIA’s opinion that the above requirements together form an appropriate minimum standard of skills and experience for a person to be eligible as an adjudicator.
7 Page 37 Society of Construction Law Australia (2014) Security of Payment and Adjudication in the Australian Construction Industry
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SUMMARY RESPONSES TO QUESTIONS POSED IN THE RIS
Questions Responses 1. Is the commencement date of 1 September 2020 for the proposed Regulation appropriate? Why or why not?
No it is not appropriate. It should be 1 September 2021. See introduction generally.
2. Do you support maintaining the exemption for owner occupier construction contracts? Why or why not?
No, see 4.3 The Exemption for Owner Occupier Construction Contracts.
3. If the exemption is removed, are additional consumer protection safeguards required? Why or why not? If so, what safeguards do you suggest and please provide comment on the suitability of imposing contract requirements under the Home Building Act 1989, noting the threshold requirement.
See 4.3 The Exemption for Owner Occupier Construction Contracts.
4. Do you support a reduction in the retention money trust account threshold from $20 million to $10 million? Why or why not?
No, see 4.1 Reduction of Threshold for Retention Money Trust Requirements.
5. Are there any reasonable circumstances in which retention money could not be deposited into a trust account with 7 days?
Seven days may be appropriate if there are no technical problems, but there may be some unforeseen circumstances arising which may give rise to delays. The clause is one of strict liability, there should be a mechanism allowing for a reasonable defence.
6. Is the suggested timeframe of 7 days to deposit money into a trust account appropriate? If not, what is a more appropriate timeframe?
As above.
7. Is there any reason why a subcontractor should not be provided with a copy of the ledger for retention money?
See 4.4 Trust Account Requirements Records and Information
8. Is the timing proposed for providing copies of the ledger reasonable? If not, why?
See 4.4 Trust Account Requirements Records and Information
9. Do you support the proposed maximum penalty units for these offences? If not, why?
No. No rationale or justification has been given for the fivefold increase in respect of corporations other than acting as a deterrence for non-compliance and an assertion as to the relative seriousness of the offences. No evidence or costings have been presented, the RIS is silent as to the cost benefit analysis of such amendments.
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10. Are the proposed qualifications and experience appropriate for adjudicators? Why or why not?
See 4.5 Setting of Minimum Eligibility Requirements and Qualifications for Adjudicators
11. Should it be mandatory for all adjudicators to have specific qualifications and experience? If not, why?
See 4.5 Setting of Minimum Eligibility Requirements and Qualifications for Adjudicators
12. Do you agree with the number of CPD points that must be undertaken by an adjudicator? If not, why?
See 4.5 Setting of Minimum Eligibility Requirements and Qualifications for Adjudicators
13. Are the CPD education and training activities for adjudicators appropriate? If not, what types of CPD activities would be more appropriate?
See 4.5 Setting of Minimum Eligibility Requirements and Qualifications for Adjudicators
14. Do you agree with the proposed transitional period for CPD of 1 September 2021? If not, what is a more suitable transitional period?
See 4.5 Setting of Minimum Eligibility Requirements and Qualifications for Adjudicators
15. Is the 5-year period proposed for renewal of an ANAs authorisation suitable? If not, why?
Yes, it is.
16. Is the date proposed for the reduction in project value suitable? If not, why?
No, it is not. It is not long enough for businesses who have not had to use retention funds before to prepare. The clause is not particularly clear especially in respect of the transition period. If the new regulation comes into force on 1 September 2020 any contract entered into after that will be subject to the new reporting requirements. However, if a builder was subject to the trust fund requirements before 1 September they would not have to provide an annual report, but it is not clear if they would need to comply with the new reporting requirements if it was a pre-existing contract that has a value under $20M, but more than $10M. Clause 22 states that the 2008 Regulation will continue to apply to a construction contract that has a value of at least $20 million and was entered into on or after 1 May 2015 and on or before 31 December 2020, but is silent in respect of those valued over $10 million and under $20 million.
