VIC Government Implementing Changes to Better Protect Subcontractor Payments.

Despite undertaking approximately 80% of Australia’s construction work, subcontractors face an alarming lack of guaranteed payment protections, placing their businesses and livelihoods at risk.

Earlier this year, MEA, together with other industry associations, conducted a Security of Payment Industry Survey. The findings were stark with 65% of respondents reporting they had not received owed retention payments in the past five years.

Our key calls for Security of Payment reforms across Australia are:

       💡 Establish a central authority to hold all retention funds, with the option to extend this framework to non-cash securities

       💡 Entitle parties to swap non-cash security, such as bank guarantees, for cash retention

The Victorian Government has taken another step in addressing security of payment issues for subcontractors, building on last year’s review of the legislative scheme, which delivered 16 recommendations to Government.

Master Electricians has been directly involved in consultation on the reforms to ensure our members’ interests are protected.

Last week, the Government introduced the Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Bill 2025.

Key changes to the Security of Payment Act will:

• Improve recovery of payments for completed work and supply of goods/services,
• Bring Victoria into closer alignment with security of payment laws in other states
• Modernise the Act to simplify claims and adjudication in the event of a dispute.

You can read more about the recent announcement here.

There is more work yet to go with this only being the first stage of reforms.  MEA commends the Victorian Government for listening to industry and it’s collaboration with industry and look forward to the future of Security of Payment reforms.

We encourage you to read our summary position on Security of Payment here for further insights.