The new reforms aim to give sub-contractors, who often wait for months to be paid, more financial security.

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Dubbo Masters Builders Association President Stuart Crowfoot said the laws would be beneficial for everyone in the building industry.

“The reason a lot of payments get delayed to sub-contractors is simply a cash flow issue with the main client who pays the builder who then pays the subbie,” he said.

“That process can get very messy particularly if a builder has two or three projects on at one time. What happened at the Dubbo hospital was that we had a lot of plumbers, plasterers and other tradies that went to the wall because of the time frame between the main contractor getting a payment and the sub-contractor getting his payment.

“These laws should allow improved cash flow, so there is no excuse for a sub-contractor not to be paid very promptly. They’ll enable the subbie to maintain his own financial viability; it will allow a more stable situation for everyone in the tier from a labourer right up to the client. They won’t change the cost of building works, all it does is replace larger and fewer payments, so now there’ll be more of them but in smaller amounts.”

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Member for Dubbo Troy Grant has welcomed the reforms.

“The reforms will allow sub-contractors to make a payment claim at least once per month, encouraging contractors further up the chain to better manage their money and not leave subcontractors in the lurch,” Mr Grant said.

A statement from NSW Fair Trading said the changes include reducing the maximum time a head contractor has to pay a sub-contractor from 30 business days to 20 business days.

“Other changes include a new payment structure so that sub-contractors can claim at least once per month for completed work, and a final claim if a contract is terminated; and, increased compliance and enforcement powers for NSW Fair Trading,” the statement said. 

“For example, NSW Fair Trading will be able to physically enter premises and inspect paperwork to ensure a company is complying with the law.”