Jul 16, 2020

Security of payment rollout under fire

Security of payment rollout under fire

The State Government is continuing to roll out its security of payment reforms for the construction industry amid Opposition accusations that it has been dragging its feet on the issue.

The reforms include a new Project Trust Account system to be progressively extended across Queensland’s $46 billion construction sector from March 2021, while other protections will commence this year.

Housing and Public Works Minister Mick de Brenni said the government was delivering $267 million in stimulus for the construction industry, and passing the latest reforms would help ensure the funds ended up in the pockets of Queensland tradies.

“When the Palaszczuk Government introduced the Building Industry Fairness Act in August 2017, we made it clear we were not going to accept late and non-payment or put it in the ‘too hard’ basket,” Mr de Brenni said.

LNP plans building Royal Commission

The State Opposition said it would continue to highlight concerns about the Building Industry Fairness (Security of Payment) and other Legislation Amendment Bill 2020, which passed Parliament on Wednesday.

LNP spokesman for Housing and Public Works Michael Hart said the party did not oppose the Bill because it strongly believed Queensland builders and sub-contractors deserved to be paid on time, every time.

But he accused the Labor Government of failing to take the issue seriously, and only rolling out a fraction of what was promised.

“It will be eight years from what was a Labor election promise to overcome non-payments of subbies until the full implementation of the Project Bank Accounts are completed,” he said.

The LNP has committed to a Royal Commission into the industry if it won government on October 31. “It will investigate non-payment issues, fraudulent practices, false statutory declarations, illegal phoenixing activity, and company collapses,” Mr Hart said.

Industry needs time to adjust – de Brenni

Mr de Brenni said that the government had listened to the needs of industry as it faced ongoing challenges in response to COVID-19, and would be allowing more time for industry to adjust and understand the Project Trust Account model before it was implemented.

“We’ve worked hard with industry to design a simple system where progress payments and retention funds are held in trust and can only be paid to people who perform the work,” he said.

“One thing we did hear loud and clear was that industry needs time to adjust before we implement a new trust account framework that is intended to apply to all eligible Queensland construction projects valued at over $1 million, particularly as many are facing the unforeseen impacts of COVID-19.”

Mr de Brenni said that Project Bank Accounts had, to date, applied to government projects valued at between $1 million and $10 million, including social housing, police stations, and schools right across the State.

“Already, over $1 billion in government contracts have now been awarded with built-in payment protections, enhancing payment security for thousands of Queensland jobs.”

This week’s amendment to the Building Industry Fairness Act delivers:

  • A simplified Project Bank Account framework, now called Trust Accounts,
  • Greater prosecuting powers to the QBCC to investigate false statutory declarations,
  • More ways for builders to recoup monies owed, including charges on land and payment withholding requests on financiers,
  • Greater transparency of the certification process to increase consumer confidence,
  • More effective regulatory powers for the Boards of architects and engineers, improving confidence in the standards of safety and quality of the built environment,
  • A statutory review into the role of property developers, including their workplace practices, in the construction industry.
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