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Subcontractors on Western Australian Government building projects worth more than $1.5 million will have the money owed to them held in a construction trust, after the Building and Construction Industry (Security of Payment) Amendment Bill passed State Parliament. The Cook Government announced the passage on 23 October 2026.
The trust replaces the project bank accounts (PBAs) that have run across State Government projects since 2019. The government says the change will protect subbies better if a head contractor goes broke, while cutting paperwork for everyone on the job.
"Subcontractors do the work that builds our schools, hospitals, homes and critical infrastructure, and they deserve confidence that the money owed to them is protected," Commerce Minister Dr Tony Buti said.
The government says the trust will cut the paperwork and banking products that PBAs require. Head contractors will be able to open trust accounts with any recognised financial institution. Detailed guidance on how the scheme will operate is still to come, and the government says it will be given to industry before the new requirements apply to any project.
The construction trust is the latest step in eight years of WA reforms aimed at stopping subbies from going unpaid when a builder collapses.
| 23 Oct 2026 | Government announces the construction trust bill has passed Parliament (WA Government) |
| 20 Oct 2026 | Building Commissioner inspections see two unnamed builders move more than $3M of subbies' retention money into trust (The Good Builder) |
| May 2026 | Separate Financial Oversight Bill introduced, letting the regulator act earlier on builders that cannot pay their debts (The Good Builder) |
| 25 Feb 2026 | Construction trust bill introduced to Parliament (WA Government) |
| Oct–Nov 2025 | Draft bill released for public consultation (Pinsent Masons) |
| 1 Feb 2024 | Retention trust scheme extends to contracts of $20,000 or more |
| 1 Feb 2023 | Retention trust scheme starts for contracts of $1M or more |
| Aug 2022 | Auditor General finds agencies "have not yet implemented effective controls" to protect subbie payments (OAG report) |
| June 2021 | Security of Payment Act 2021 passes, weeks after the Pindan Group collapse (Allens) |
| 1 July 2019 |
Project bank accounts required on State Government projects over $1.5M |
| Oct 2018 | Fiocco inquiry delivers 44 recommendations on security of payment |
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The 2022 audit gives a sense of why the PBA system is being replaced. Of 33 subcontractors surveyed, 22 said they had had payment problems on government projects. Main Roads accepted incomplete or wrong head-contractor statutory declarations in 8 of the 23 it examined
The 2021 Act's other protections stay in place. These include payment within 25 business days of a subcontractor's claim, and fast "pay now, argue later" adjudication. Builders who fail to put retention money into trust face fines of up to $250,000 for a company.
For subcontractors, the main benefit is protection if a head contractor becomes insolvent. Payments on State Government building projects over $1.5 million will be held in a construction trust, which the government says will make them better protected.
Head contractors bidding on WA government work should expect new obligations once the scheme starts. The detail will come through the government's guidance to industry.
The timing matters because there is a lot of WA government work going out now. Last week alone, the state awarded the main works contracts for the new Tom Price and Paraburdoo hospitals to Cooper & Oxley, and opened a $30 million tender for Como Secondary College. Projects like these, above the $1.5 million threshold, are the ones the trust will cover once it starts.
"These reforms reinforce the Cook Labor Government's commitment to supporting local small and medium businesses," Finance Minister David Michael said.
No start date has been set. The government says detailed guidance will go to industry before the new requirements apply to any State Government project.
In the meantime, Suppliers can:
Check whether their current WA government jobs run through a PBA, and how the change could affect future bids.
Make sure retention money on contracts of $20,000 or more is going into a properly named trust account, and that subbies have been told the account details in writing.
Watch for the government's industry guidance and any regulations that support the new scheme.
Read new WA tender documents closely for construction trust clauses once the scheme starts.
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