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Collaboration is acknowledged as a key to continued growth in the Australian construction industry. Government, as a major industry client, has an important role to play with respect to fostering collaboration and ensuring the global competitiveness of the industry. The paper draws upon data collected for the Construction 2020 study and aims to demonstrate that government can a) help to break down the adversarial situation that currently exists between clients, project managers and subcontractors; and b) allow the supply chain to collaborate more effectively in terms of satisfying the relational and financial needs of all parties. Government can also provide a clear set of guidelines (backed up by a functional dispute resolution system) that will promote confidence with respect to forging relationships. Thus, the paper will discuss the way in which public policy can be more closely aligned with actual industry needs in order to promote greater collaboration.