South Australia recently passed significant amending regulations which exempt high-value Crown contracts from key parts of the Building and Construction Industry Security of Payment Act 2009 (SA).

The amended Building and Construction Industry Security of Payment Regulations 2011 (SA) introduce a new class of “prescribed contracts”, being a contract between the Crown and another person under which the total amount payable over the term of the contract (excluding any extension) will exceed $4 million (excl. GST). The Crown includes a Minister, agency or instrumentality of the Crown.

The Regulations as amended, provide that a party to a “prescribed contract” is exempt from the operation of a number of key provisions of the Act. As a result, the Crown will only be exposed to payment and enforcement action under the Act in respect of lower-value contracts. The provisions from which higher-value Crown contracts are exempt, include:

• the consequences of failing to provide payment schedules;
• the regime providing for swift adjudication of payment claim disputes; and
• the contractor’s right to suspend work for non-payment in accordance with the Act.

The newly introduced Regulations are expressed to apply to contracts entered into before or after their commencement on 1 May 2025. It remains to be seen precisely how this will apply to construction work or goods and services already supplied under existing contracts.

A copy of the amending Regulations can be found here.