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On 18 October 2024, the Victorian Government released its response to the Environment and Planning Committee’s Report on the Building and Construction Industry Security of Payment Act 2002 (Vic) (SOP Act) (the Report).

The SOP Act was last amended in 2006, and as we flagged in our article of January 2024, it looks set for major reform after the report made 28 broad-ranging recommendations intended to strengthen the statutory right to payment and improve the adjudication process in Victoria.

The Government’s response to the Report accepts 16 of the recommendations in full, and 12 of them in principle or in part. The recommendations, and the Government’s response, aim to bring the SOP Act in line with reforms made in other states, in particular those adopted in New South Wales and Western Australia, as well as to modernise the operation of the legislation to address cash-flow issues faced by contractors.

Notably, the Government has accepted the recommendation to abolish the concept of ‘excluded amounts’ which is unique in Victoria. We anticipate that the enactment of these reforms will lead to an increase in security of payment activity in Victoria. 

We briefly address key recommendations which have now been accepted by the Government next.

Key Reforms

The Government’s response addresses all 28 recommendations in total. Aside from those discussed above, the remainder are all either supported in full, in part or in principle. You can view the full response here.

Of interest, while expressing in principle support for changes, the Government has recommended that further consideration be given to complex matters such as the broadening of the SOP Act to apply to domestic building disputes between homeowners and builders, as well as the introduction of statutory retention or trust schemes.

We will provide updates on the legislative progress of these important changes to the SOP Act in due course.


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Timana Hattam

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Ante Golem

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Clare Smethurst

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Michael Lake

Partner, Sydney

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Dan Dragovic

Partner, Perth

Dan Dragovic

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Australia Melbourne Dispute Resolution Construction and Infrastructure Disputes Energy Energy Disputes Infrastructure Geoffrey Hansen Timana Hattam Ante Golem Clare Smethurst Michael Lake Dan Dragovic