Govt unveils construction sector shake up

UPDATE: THE Palaszczuk Government cabinet met on Monday to begin drafting a bill which will trigger historic reform to the Queensland building and construction sector aimed at delivering greater security of payment to subcontract small businesses.

The major reform was announced today by the Premier and Housing Minister Mick de Brenni with key members in attendance from the Subcontractors Alliance formed after the Walton Construction collapse in 2013 left debts of more than $70m including $3m owed to subbies who worked on the Nambour Coles project.

The new legislation will require project bank accounts to be used for all Queensland Government contracts over $1m but less than $10m from January 1, 2018, and for all government and non-government contracts over $1m from January 1, 2019.

The move responds to a Deloitte Report commissioned by Housing Minister Mick de Brenni which has revealed the legislation could add more than $6bn annually to State Gross Product and drive the creation of an extra 1000 jobs in the construction sector.

Premier Annastacia Palaszczuk said action on security of payment for subcontractors would set Queensland's construction industry up for long-term growth.

"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," the Premier said.

"The balance hasn't been right. It's time to get construction back on the level.

"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.

"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 Opposition now had to choose whether it stands up for "shonky" builders or with the government to the benefit of the state's 69,000 construction sector small business and their employees.

He said Project Bank Accounts would ensure subbies were paid at the same time as the principal contractor.

"The head contractor can't be paid until they're paid,'' he said.

"What we have seen is a power imbalance that has existed for generations.

"Our system puts the industry back on the level with the same rights to get paid."

Mr de Brenni said compromises achieved in the Senate by Senator Nick Xenophon and Senator Derryn Hinch as part of the passage of the Australian Building and Construction Commission Bill negotiations provided no clear way forward at a Commonwealth level.

"Only the Palaszczuk Government is standing up for small business sub contractors," he said.

"Cabinet considered the security of payment issue on Monday and drafting of that Bill has commenced.

"What's clear is that Queensland wants a change to being a fairer state with fairer rules around security of payment.

"That change the Palaszczuk Government will deliver.

"We have listened to Queenslanders and will act on behalf of small businesses that deliver jobs."

Comment has been sought from Master Builders Queensland and Urban Development Institute of Australia.

Meanwhile Federal Member for Fisher, former builder and construction lawyer Andrew Wallace, said the passing today of the Australian Building and Construction Commission legislation was was great news for small businesses, taxpayers and our economy.

"For too long, militant unions, namely the CFMEU, have run roughshod over the rights of just about everyone involved in Australia's building and construction industry," Mr Wallace said.

"Through their blatant standover tactics and intimidation of companies large and small, Master Builders Australia estimates that the actions of the CFMEU have inflated the price of building infrastructure like schools, hospitals and highways by at least 30 per cent."

Mr Wallace can expect to see changes wound back he recommended made to the Building and Construction Industry Payments Act made in 2014 by the LNP Newman Government.

Timeframes in which claims can be made have been extended and adjudicators will be able to award costs if they find on behalf of the claimant and to charge interest on withheld amounts.

Mr de Brenni said the moves would prevent "shonks" from slowing down the process to pressure subbies to walk away from legitimate claims.

EARLIER: The Palaszczuk Government will introduce a trial of new security of payment provisions in the Queensland construction industry from January, 2018.

It will be followed in 2019 by a full roll out of project bank accounts in January 2019 to firewall money paid by a client to the head contractor but owed to subcontractors who have completed work and supplied material to the project.

The timing ensures the issues will be front and centre at the next Queensland state election due by January, 2018.

According to a Deloitte Economic s report released last Sunday the moves could add more than $6b annual to Gross State Product and add an additional 1000 jobs to the sector annually.

The Deloitte report identified an immediate 2.5% saving in construction costs gained from subbies not having to price in the risk of non-payment, an issue that plagues the industry nationally.

A Senate Inquiry in 2015 found insolvency cost the industry more than $3bn annually and that it was increasiungly being used as a business model to avoid debt.

Announcing a wide ranging Palaszczuk Government review of the construction sector, Houssing Minister Mick de Brenni said it was committed to making sure that subcontractors get paid on-time and in-full, every time.

"Project bank accounts (PBAs) create a fair system where progress payments are safely held in trust independent of the head contractor and principal," Mr de Brenni said.

"To make sure that we get the system right, the government will roll out the PBA model to both government and private sector projects over $1 million from January 2019, subject to successful outcomes from implementation on government projects between $1 million and $10 million."

The move aims to quarantine money owed to subbies in the event of the principal contractor's insolvency.

Mr de Brenni said 2014 amendments to the Building and Construction Industry Payments Act were proposed to enhance the independence of the dispute resolution process with the Queensland Building and Construction Commission, the introduction of education programs to enhance the skills of QBCC licensees, measures to stop unfair contracts and combining all legislation relating to security of payment provisions.

Reform is also proposed in nine other areas of the construction sector including the Home Warrant Scheme, the Plumbing and Drainage Act, the design and siting regulations for dwellings to develop best practice guidelines, address perceived conflicts of interest between building certifiers and their clients, strengthen regulatory powers around non-conforming building products, improved access for people with disabilities, mandatory and voluntary provisions to increase uptake of liveable housing design and the increased use of sustainable building measures in homes


Feel the beat and move your feet

Feel the beat and move your feet

ZumbaNoosa celebrates a decade

Dinosaurs at the Plant Fair

Dinosaurs at the Plant Fair

Dinosaur bone search added attraction

Time to help out to ease drought

Time to help out to ease drought

How you can help struggling farmers

Local Partners