Project bank accounts to secure payments for subcontractors

The Palaszczuk Government has flagged historic reform for the Queensland construction industry, with a suite of measures including project bank accounts to ensure security of payment for subcontractors. “We took a commitment to the last election to review security of payment for subcontractors. The evidence is in and it shows that all Queenslanders will benefit from making sure people get paid in-full, on-time and every time,” Premier Annastacia Palaszczuk said. “The balance hasn’t been right. It’s time to get construction back on the level.” The Premier said project bank accounts would provide security and confidence to the 69,000 small subcontracting businesses around the State. “What’s been clear from listening to subcontractors is that some more unscrupulous operators in the industry are using non-payment as a business model,” she said. “Too many families have been torn apart because of this issue, and too many tradies have lost their businesses and even their homes.” Housing and Public Works Minister Mick de Brenni said the Palaszczuk Government was now preparing legislation to phase in project bank accounts across the state. “Project bank accounts are the centrepiece of a suite of measures that will make sure subbies aren’t left out in the cold,” he said. “From January 1 2019, every construction project over $1 million will be required to operate a project bank account. “We will be supporting industry to transition by introducing project bank accounts on all Queensland Government construction projects between $1 million and $10 million from the start of 2018. “The Deloitte report is clear – security of payment means more jobs and more investment from small business.” Subcontractors Alliance chair Les Williams said the group was still to study the package in depth, but was very happy to see signs of reform. "It’s been a long time coming," he said. "We most certainly need something put in place because I think non-payment of subcontractors in the industry at the moment is the worst it’s ever been." Subcontractors Alliance chair Les Williams. There was a need for construction trusts that would quarantine payments from builders' insolvency, Mr Williams said. "At the moment we have a major issue with a lot of builders going into insolvency or using insolvency to avoid debt," he said. "Since the start of 2014 (subcontractors in Queensland) have lost about $130 million to insolvency alone - so the amounts involved here are huge." Mr de Brenni said that project banks accounts were part of a series of proposed reforms outlined in Palaszczuk Government’s proposed Queensland Building Plan. Matters covered in the Queensland Building Plan include the QBCC Home Warranty Scheme, non-conforming building products, licensing reforms and a potential single housing code for Queensland, among others. Consultation on the Queensland Building Plan will be open until April 2017. More information about the plan can be found at www.hpw.qld.gov.au.

Project bank accounts to secure payments for subcontractors

Industry Queensland

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