The ACT government should work quicker to implement reforms to the building regulatory system, Master Builders ACT said.
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It comes as small businesses in Canberra have lost millions following the collapse of a construction company.
Local building firm Banyan Constructions went into liquidation in January and owed more than $21 million in debts. Some subcontractors were owed more than $1 million.
Master Builders ACT chief executive Michael Hopkins said the breakdown of the company highlighted deficiencies in the ACT's building system.
He said recent laws introduced by Minister for Building Regulatory Improvement Gordon Ramsay failed to prevent corporations from undermining the system.
"It's evident that these new laws have not worked to protect subcontractors and suppliers from the collapse of Banyan Constructions," Mr Hopkins said.
"The MBA had warned the Government that these reforms would not work, and instead should be focused on proactively avoiding building quality problems rather than dealing with problems after they occur."
But the ACT government has rejected Master Builders claims.
In response, a spokeswoman said it was working on 43 reforms that would "strengthen the ACT building industry" but said reforms for security of payments for subcontractors was the next in a series of changes to be considered.
"The laws Mr Hopkins is referring to were not designed to cover security of payments," she said.
"It is disappointing that the 'Master Builders' Association' has continued to conflate issues and resist reforms which are nation leading and are designed to bring about the highest quality buildings in the territory."
Mr Hopkins pointed to the landmark 2018 Shergold Weir Building Confidence Report, which had 24 recommendations related to compliance and enforcement systems in the building industry.
He said a recommendation related to licensing and registration remained incomplete in the ACT.
"This report was released in 2018 so we are now getting close to two years since this report was released and there are still many recommendations that haven't been implemented in the ACT," Mr Hopkins said.
"There is recommendation one, which deals with licensing, we know that the ACT government will look at that recommendation and we have suggested to them the Banyan case would be a good case study to use."
The ACT government said of the 20 reforms that related to state and territory systems, seven were already implemented in territory laws, seven were partially in place, one was of limited relevance and one was not applicable in the ACT.
The spokeswoman also pointed to reforms to licensing laws introduced in 2019.
"Builders whose companies go into liquidation already have their licences suspended automatically. After three months their licences can be cancelled if their company remains in this state," she said.
"In addition to this, should the builder apply for a new licence with a new company, their history will be assessed and considered as a factor of whether they should be granted a new licence."
Mr Hopkins said licensing needed to deal with business management skills or the company's financial capacity when it came to renewals.