Queensland boosts protection for subcontractors

Queensland boosts protection for subcontractors

The Palaszczuk government has introduced a bill that protects building subcontractors from phoenix activity and unfair pay, while promoting fairness in the industry.

The Queensland government is promising to make sure construction subcontractors get paid fairly for the work they do, by introducing legislation that strengthens their protections.

The Building Industry Fairness (Security of Payment) Bill was tabled in Parliament last month. It seeks to enhance security of payment laws, modernise provisions for making subcontractor charges, expand access to security of payment legislation and encourage greater accountability.

The introduction of project bank accounts (PBAs) is key to this plan. These trust accounts will hold progress payments and retention money independent of the head contractor and principal, to promote fairness.

If passed, this proposal will involve two stages. PBAs will first become mandatory on all government building projects valued between $1 million and $10 million from January next year. All public or private building projects over $1million will follow suit in 2019.

However the rules don’t apply to subcontractors involved in civil or engineering projects and only first tier subcontractors (those who deal directly with the head contractor) will be protected by PBAs at this stage.

The bill also aims to prevent phoenix activity by cracking down on ‘shadow directors’ who’ve been banned from running construction companies but still manage to pull the strings from behind the scenes.

Expanding the financial investigation powers of the Queensland Building and Construction Commission (QBCC) is one way to ensure that small and medium construction businesses are always paid the full amount on time, according to Mick de Brenni, the Minister for Housing and Public Works.

“For too long the building and construction industry has operated by pushing the majority of the risk for projects onto subcontractors—often family run businesses,” Mr de Brenni said.

“Our new laws will bring back financial standards to the industry. It will give the building regulator the QBCC a line of sight to companies that may be in trouble.”

Among other changes, the proposed laws also strive to toughen penalties for unlicensed work, by introducing fines of up to $44 000 a year and possible jail time.

But nothing is guaranteed yet – the bill still needs to be subjected to further consultation before going before Parliament for a vote.