The Master Builders Association has called on the ACT government to scrap "inflexible contracts" for construction projects that are forcing some builders to wear increased costs.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
It says the ACT government has a responsibility to be a "model client" that other developers can follow.
Representatives of the association met ACT Chief Minister Andrew Barr to discuss the state of the building industry following a series of high-profile business collapses.
In the case of builder Rork Projects, administrators have estimated subcontractors, suppliers and other creditors will be left more than $15 million out of pocket.
Mr Barr said the ACT government recognised the financial pressures some construction companies were facing.
"It's not easy for anyone to see companies going into liquidation, and people losing their jobs," he said.
"The consequences can be significant for employees, subcontractors and clients who are waiting for their homes to be built."
Mr Barr has asked the relevant ACT government ministers to participate in a roundtable discussion with peak bodies and industry stakeholders in the coming weeks.
"The roundtable will provide a report back to the ACT government following their discussions," he said.
Security of payment laws 'unworkable'
Master Builders Association of the ACT welcomed the government's engagement but said all levels of government must adjust their reform agenda to suit economic conditions.
Master Builders ACT CEO Michael Hopkins said new security of payment laws were introduced in the ACT that were "unworkable, out of step with other jurisdictions, and were introduced without industry consultation".
Independent ACT senator David Pocock has also called for a national approach to strengthening security of payments laws, which are designed to help subcontractors recover overdue payments.
Mr Hopkins said federal industrial relations laws and proposed ACT developer licensing laws would make matters worse.
"Every new regulation adds cost, impacts productivity, and adds to the stress that small local businesses are currently feeling," he said.
The association welcomed the ACT government's commitment to engage on "controversial parts" of the proposed Property Developers Bill, which include powers to issue rectification orders for residential building work up to 10 years old.
Mr Hopkins said the ACT government also agreed to review the territory's security of payment laws.
Contractors 'locked in' by govt projects
However the association called out the ACT government for its infrastructure projects, saying its procurement and management process could be improved.
"While the ACT government generally paid its bills on time, government needs to do away with inflexible contracts which in some cases have locked in contractors to labour and material prices before inflation really hit," Mr Hopkins said.
The association wants to see amendments to the standard building contracts issued by the government, that would allow for costs outside the control of the builder or client - such as increases in fuel costs, labour and materials - to be shared.
The ACT government has a responsibility to be a "model client" that developers in the private sector can follow, Mr Hopkins said.
MORE NEWS:
The Chief Minister said construction insolvencies were a national issue driven by increased operating costs, reduced availability of finance and fluctuations in the cost of materials and labour.
Mr Barr said the best way the ACT government could support the industry was through a strong public infrastructure pipeline.
"These projects will create local jobs and reduce uncertainty in the market into the future. This is what this government will continue to focus our efforts on," he said.