Master Builders at odds with subbies over payment policy

Premier Annastaciaa Palaszczuk and Housing Minister announce significant reform to ensure subbies get paid, supported by Subcontractors Alliance representatives at right Les Williams, Kylie McIlroy and Juanita Gibson.
Premier Annastaciaa Palaszczuk and Housing Minister announce significant reform to ensure subbies get paid, supported by Subcontractors Alliance representatives at right Les Williams, Kylie McIlroy and Juanita Gibson.

MASTER Builders Queensland says Palaszczuk Government construction industry security of payment reforms announced this week did not go far enough to be truly effective, but also raised questions about conclusions that had been drawn from a Deloitte report into the sector.

However Queensland Speaker and Nicklin independent Peter Wellington, who included security of payment reform in his exchange of letters with Annastacia Palszczuk that allowed her to form government, is delighted what is proposed.

Master Builders deputy chief executive officer, Paul Bidwell, said security of payment needed to include everyone in the industry's supply chain from the principal to the supplier to ensure payment in full and on time.

The Queensland Government this week announced new legislation to require from 2019 the establishment of project bank accounts for all contracts over a million dollars to insulate money owed to subcontractors for work done and materials supplied.

Mr Bidwell said the proposed legislation focussed on the builder and the subbie but did not go up or down from there.

And he raised questions about the Deloitte report that provided justification for the move after a series of high profile insolvencies starting with the 2013 Walton Construction collapse which collectively cost unsecured subcontract creditors hundreds of millions of dollars.

Project bank accounts were recommended by the Queensland Scurr Report in 1996, the Cole Royal Commission in 2004 and the 2015 Senate Economic standing committee's into construction industry insolvency which it estimated totalled $3 billion annually.

Mr Bidwell said the Deloitte analysis relied on the United Kingdom experience with project bank accounts for infrastructure construction but said it then excluded infrastructure construction in Queensland from its recommendations.

"I'm keen to talk to Deloittes about that,” he said.

"I'm nervous about the Deloitte Report. We have a great relationship with the Minister, half our 8500 members are subbies, and there are problems that need to be fixed.

"I'm not convinced as to how and sceptical of the recommendations of the Deloitte Report.”

Housing Minister Mick de Brenni has offered peak industry groups a briefing from Deloittes to improve their understanding off what has been proposed and why.

Mr Wellington has praised the planned legislation, saying project bank accounts were a solid first step to ensuring people were paid for the work they did.

"My hat goes off to Less Williams and the Subcontractors' Alliance who have lobbied hard since the Walton collapse,” he said.

"They have maintained the pressure on government where no previous building group has been able.

"This outcome is a credit to their continued persistence and to the Sunshine Coast Daily for maintaining the profile of the problem without which governments don't respond.

"At long last we are seeing a light at the end off the tunnel.”

Mr Wellington said he would be speaking with Mr Williams and other interested parties on Friday about other significant matters around the collapse of the Walton group.

"My involvement with Les Williams to recover funds has left me in no doubt there is an industry within the building sector that is designed and structured to use money for other purposed that should be going to subbies,” he said.

"I have no doubt as a result of numerous discussions with Mick de Brenni that the case study of the Walton collapse has highlighted industry practices and provided the Housing Minister with the justification he needed to change how the building industry operates.”

Mr Williams said there was no justification for people working and not being paid.

"We have a fundamental right to be paid that has to be protected,” he said.

"Arguments will be raised about red tape but the Deloitte report shows project costs will come down 2.5%.

"We're happy its heading in the right direction. There are a few issues that still need to be addressed and added and a few things we would like to talk to the government about.”

Topics:  Annastacia Palaszczuk master builders queensland mick de brenni paul bidwell peter wellington project bank accounts security of payment subcontractors alliance walton construction

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