MEDIA RELEASE: Tradie Pay Guarantee to Benefit Cooper Tradies

26 February 2019

A Shorten Labor Government will protect sub-contractors working on Government projects from being left unpaid when dodgy businesses go bust through the implementation of the Tradie Pay Guarantee.
Labor will establish a new requirement for large Commonwealth construction projects that would see project bank accounts established that use cascading statutory trusts, ensuring that all businesses down the supply chain involved get paid on time.
Labor will also develop a national framework to ensure that no sub-contractors or small businesses are left out of pocket as a result of dodgy “phoenix activity”.
We will set up an efficient process for handling disputes and establish a federal security of payments legislative regime based on the recommendations of the Murray Review.
Labor will then work with the states and territories to harmonise schemes across the country where possible, including consulting on the referral of powers to the federal program. This would apply to a broader range of construction activity.
Further, we will create a $7 million Tradie Litigation Fund for subbies to access justice and see regulators take dodgy bosses to court and win.
Only a Shorten Labor Government will protect the livelihoods of small businesses, workers and subcontractors who fall victim to dodgy building bosses and ensure perpetrators face their day in court. 
The practice of so-called “Phoenix activity” – where dodgy directors deliberately burn companies in an attempt to avoid their obligations to employees, government and honest businesses – is estimated to cost the Australian economy more than $5 billion per year.
The new $7 million Tradie Litigation Fund will give the Australian Securities and Investments Commission the ability to run more difficult court cases without draining the corporate watchdog’s resources.
Not only will this give tradies their day in court, it will also act both as a punishment and deterrent for dodgy directors. People who deliberately burn their companies should be subject to the full consequences of failing directors’ duties, including being liable for compensation, fines of up to $200,000 or five years behind bars.
These measures - along with previous commitments such as naming and shaming phoenix directors and increasing penalties associated with phoenix activity – will help protect Australian jobs and the economy.
It’s time the Morrison Government stopped going soft on corporate crooks, and adopted Labor’s plans to crack down on dodgy phoenix activity.
Only Labor will stand up for tradies and make dodgy bosses pay.