Building Industry Fairness (Security of Payment) and Other Legislation Amendment Bill 2020

Introduced: 5/2/2020By: Hon M de Brenni MPStatus: PASSED with amendment
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Plain English Summary

This is an omnibus bill covering multiple policy areas.

Overview

This bill reforms Queensland's building industry payment protections and regulatory framework. It replaces Project Bank Accounts with a simplified statutory trust system to protect subcontractor payments, strengthens the QBCC's ability to address fraud, introduces a demerit point system for building certifiers, enhances oversight of architects and engineers, and preserves review rights for retirement village transition plans.

Who it affects

Subcontractors gain stronger payment protections through trust accounts. Head contractors face new obligations to administer trust accounts with significant penalties for non-compliance. Building certifiers, architects, engineers and QBCC licensees face enhanced regulatory oversight and accountability measures.

Subcontractor payment protections

Replaces the existing Project Bank Account system with project trusts and retention trusts that hold subcontractor money separately. The new framework phases in from government contracts ($1 million+) in July 2020 to all building contracts ($1 million+) by July 2022. New recovery tools let subcontractors and head contractors pursue unpaid adjudicated amounts through payment withholding requests and charges over property.

  • Simplified trust framework with one project trust account per contract and one retention trust account per contractor
  • Head contractors must declare subcontractor payment status with every payment claim
  • New payment withholding request allows money to be held by a higher party in the contractual chain when adjudicated amounts go unpaid
  • Head contractors can register a charge over a developer's property for unpaid adjudicated amounts
  • Phased rollout from government contracts to all building contracts valued at $1 million or more by July 2022

Tackling fraud and financial misconduct

Implements the Special Joint Taskforce's recommendations to strengthen the QBCC's enforcement powers. Makes it easier to prosecute those who cause significant financial loss through deliberate contract non-compliance and extends prosecution timeframes from two to three years.

  • Reversal of onus of proof for the 'reasonable excuse' defence when someone deliberately causes financial loss through contract non-compliance
  • New offence for giving false financial information that is passed on to the QBCC (100 penalty units)
  • QBCC prosecution timeframe extended to three years after an offence or two years after it comes to the QBCC's knowledge
  • Details of excluded and permanently excluded individuals (from bankruptcies or company collapses) can be published for up to 10 years

Building certification reforms

Introduces a demerit point system where certifiers who accumulate 30 points in three years can be disqualified. Strengthens the certifier's duty to act in the public interest and gives building owners more information and options during construction.

  • Demerit point system: 30 points in three years leads to licence disqualification (one year for first disqualification, three years for subsequent)
  • Building owners can request inspection documentation from their certifier at any stage
  • Certifier's primary duty to act in the public interest clarified and given precedence over other obligations
  • Alternative recognition pathway for certifier licensing without accreditation body membership
  • Record-keeping period for inspection documentation extended from five to seven years

Licensing and financial requirements

Strengthens the Minimum Financial Requirements framework for QBCC licensees and improves cross-jurisdictional information sharing about licence status.

  • Executive officers personally liable for ensuring their company meets financial requirements, with escalating penalties up to imprisonment
  • Penalty for failing to provide financial information increased to 200 penalty units
  • QBCC can exclude accountants who provide false or misleading financial information
  • Excluded individuals now also barred from holding site supervisor licences
  • Licensees must notify QBCC if their interstate or New Zealand licence is granted, cancelled or suspended

Architects and professional engineers

Gives the Board of Architects and Board of Professional Engineers enhanced compliance and enforcement powers, bringing them into line with other Queensland regulators like the QBCC.

  • New audit powers allow boards to proactively check compliance rather than waiting for complaints
  • Enhanced investigatory powers including entry to places, search and seizure of evidence
  • Practitioners must notify their board of changes affecting their fitness to practise
  • Board of Architects prosecution timeframe extended from six months to one year

Retirement village review rights

Preserves the right for affected parties to seek QCAT review of chief executive decisions about retirement village transition plans, replacing a transitional regulation due to expire in November 2020.

  • Right to apply to QCAT for review of transition plan decisions made permanent in the Retirement Villages Act 1999
  • Retirement Villages (Transitional) Regulation 2019 repealed as it is no longer needed

Bill Story

The journey of this bill through Parliament, including debate and recorded votes.

Introduced5 Feb 2020View Hansard
First Reading5 Feb 2020View Hansard
Committee5 Feb 2020View Hansard

Referred to Transport and Public Works Committee

Committee Findings
Recommended passage

The Transport and Public Works Committee examined the bill and tabled Report No. 36 on 20 March 2020. The committee recommended the bill be passed and made 11 additional recommendations for amendments, all of which the Queensland Government accepted. The committee's recommendations focused on clarifying definitions, strengthening trust account protections for subcontractors, closing loopholes around unlicensed building work, and improving fire protection regulation.

Key findings (5)
  • Stakeholders identified ambiguities in key definitions that determine when trust accounts must be established, prompting the committee to recommend a review of all affected definitions.
  • The committee found a loophole allowing residential construction work to be split into multiple small-scale contracts to avoid project trust requirements and recommended anti-avoidance measures.
  • Industry stakeholders raised concerns that not all relevant contractors, including electricians, architects, and engineers, were protected by the retention trust regime.
  • The committee identified that passive fire protection work was incorrectly classified as 'building work' rather than 'fire protection' under the QBCC Act, creating safety and enforcement gaps.
  • The committee recommended a review of the role of property developers in the building and construction industry, including their financial capacity, ethical behaviour, and work practices.
Recommendations (12)
  • The committee recommends the Building Industry Fairness (Security of Payment) and Other Legislation Amendment Bill 2020 be passed.
  • The committee recommends that the Minister for Housing and Public Works review all definitions identified by stakeholders as having ambiguities and amend the legislation as appropriate.
  • The committee recommends that the Bill be amended to include measures to prevent the use of multiple contracts on the same or adjacent land in relation to contracts for small scale residential construction work.
  • The committee recommends that the Bill be amended to make it clear which parties are intended to be excluded by the exemption allowed in proposed new section 15E.
  • The committee recommends that the terms used in proposed new section 15F be reviewed to ensure the intent is clearly articulated and amended as considered appropriate.
  • The committee recommends that clause 63 of the Bill (proposed new section 20) be amended to ensure that the account nominated by the subcontractor must be under the control of the subcontractor.
  • The committee recommends that the Bill be amended to ensure that all relevant contractors are protected by the trust regime.
  • The committee recommends that both the need for and location of proposed new section 55B(6) of the Bill be reconsidered and that the Bill be amended accordingly.
  • The committee recommends that section 42 and Schedule 1A(8) of the Queensland Building and Construction Commission Act 1991 be amended to omit the exemption allowing an unlicensed person who enters into a contract to carry out building work.
  • The committee recommends that the QBCC Act be amended to include 'passive fire work' in the definition of 'fire protection'.
  • The committee recommends that the Minister for Housing and Public Works considers undertaking a review of the role of property developers in the building and construction industry.
  • The committee recommends that should the review of property developers be conducted, it be done in consultation with industry stakeholders, with findings reported by 1 July 2021.
AI-generated summary — may contain errors
Committee Report7 Feb 2020

Committee report tabled

Second Reading14 July 2020View Hansard
19 members spoke8 support11 mixed
11.45 amMr HARTMixed

Did not oppose the bill but criticised the government for taking eight years from its 2015 election promise to fully implement subcontractor payment protections, arguing the reforms are too slow and calling for a royal commission type investigation into the building industry.

The LNP stands behind a royal commission type investigation into the building industry. That is what we really need to see here because at the end of the day there are issues even on a federal level that need to be dealt with.2020-07-15View Hansard
4.46 pmHon. MC de BRENNISupports

As the responsible minister, moved the second reading and strongly advocated for the bill's trust account reforms to ensure subcontractors are paid on time, highlighting personal stories of tradies affected by non-payment.

For too long the issue of security of payment has been in the too-hard basket, and I think that is beneath us as a state.2020-07-14View Hansard
11.54 amMr KINGSupports

Spoke as committee chair, noting the committee recommended the bill be passed with 12 recommendations, and emphasised the reforms will ensure workers and subcontractors get paid.

This bill builds on our security of payment laws and will further ensure that workers, including subcontractors, will get paid.2020-07-15View Hansard
5.09 pmMr HARTMixed

Stated the LNP will not oppose the bill, supporting the principle that tradies deserve to be paid, but heavily criticised the government's slow implementation, repeated delays since the 2015 election promise, and last-minute amendments not provided to the opposition.

The LNP's position is firm on the principle that everybody deserves to be paid for the work they do. Unfortunately, late payments and non-payment of Queensland tradies remains an ongoing concern in the building and construction industry.2020-07-14View Hansard
12.03 pmMr SORENSENMixed

Supported the principle of ensuring subcontractors are paid but criticised the government's previous legislation as weak and insufficient, sharing personal examples of tradies left unpaid in his electorate.

Security of payment reform has been talked about forever and the government must get it right. The government has failed previously with poor legislation that does not protect subbies.2020-07-15View Hansard
12.13 pmMr BROWNSupports

Strongly supported the bill, arguing trust in the payment system equals confidence in the economy and citing Deloitte research projecting the reforms would create 2,373 jobs over 20 years.

I support this bill because trust equals confidence, and confidence equals certainty in the economy—certainty for tradies and employers to put on that apprentice and create more jobs.2020-07-15View Hansard
12.18 pmMr CRISAFULLIMixed

Supported the principle of fair payment but argued the reforms need to balance protection with reducing red tape and administrative burden on smaller builders and developers, calling for a commission of inquiry.

The greatest gift we can give anyone in any sector but particularly building and construction is certainty—certainty that when they are quoting on a job they are not going to be stomped on by the unions, certainty that when they are quoting on a job they will be paid.2020-07-15View Hansard
12.24 pmMr WHITINGSupports

Supported the bill as part of ongoing reform to ensure subcontractors are paid on time and in full, also welcoming retirement village protection amendments.

What we need to see in Queensland is that subbies, contractors, builders and tradies being paid on time, every time and in full.2020-07-15View Hansard
12.31 pmMr PERRETTMixed

Supported the bill but argued the government's earlier legislation was weak and called for a commission of inquiry, highlighting the collapse of Ri-Con Contractors which left hundreds of thousands owed to Gympie businesses.

These businesses are among more than 300 unsecured creditors, including subcontractors, across Gympie and the Sunshine Coast who are owed millions.2020-07-15View Hansard
12.39 pmMr MADDENSupports

Supported the bill, focusing on the amendments to the Retirement Villages Act that preserve QCAT review rights for transition plans.

The amendments ensured that significant changes in the operations of retirement villages occur in a manner that is clear, orderly and fair to the residents.2020-07-15View Hansard
12.45 pmMr MICKELBERGMixed

Did not oppose the bill but expressed considerable concerns, citing constituents owed over $120,000 by a collapsed builder and criticising the minister for not responding to their correspondence.

Actions speak louder than words, so it is easy to understand why many Queenslanders have no confidence in the Palaszczuk Labor government to look out for the interests of tradies and other subcontractors.2020-07-15View Hansard
12.48 pmMr KELLYSupports

Supported the bill as delivering fairness for subcontractors and small businesses, praising the government for listening to industry and taking time to get the reforms right.

At the core of this bill is the matter of fairness—fairness for subcontractors, fairness for small business—and only Labor is delivering that.2020-07-15View Hansard
12.55 pmMr MILLARMixed

Agreed subcontractors deserve to be paid but raised concerns about red tape burden on small family-owned construction businesses in regional Queensland, calling on the minister to review the impact on small contractors.

We also believe that a fair day's work deserves a fair day's pay. I think everybody in this House is in agreement with that.2020-07-15View Hansard
2.01 pmMr MOLHOEKMixed

Criticised the bill as providing false hope, arguing project bank accounts only cover large projects and at least 50-70 per cent of tradies are not covered, suggesting insurance-based protections would be more effective.

I feel that there are aspects of this legislation that are quite disingenuous. In a sense, it provides false hope.2020-07-15View Hansard
2.09 pmDr ROWANMixed

Supported the bill but raised concerns about the adverse impacts of mandated project bank accounts on small to medium builders, relaying feedback from local builders concerned the model could shut down their businesses.

Local builders in my electorate of Moggill and across the western suburbs have contacted me and shared their very real concerns that such a model will have not only on their industry but also on their small business viability.2020-07-15View Hansard
2.19 pmMs SCANLONSupports

Supported the bill, highlighting that dodgy operators withholding payment causes serious consequences for tradies in her Gold Coast community, including mental health impacts.

We on this side of the House believe that if you do the work you should get paid on time, in full, every time.2020-07-15View Hansard
2.23 pmMr BENNETTMixed

As a registered builder, acknowledged the need for reform but criticised the government's approach as increasing red tape and costs without proven effectiveness, citing a damning Queensland Audit Office report on the QBCC.

It is hard to forget that the minister cherrypicked items out of reports and commissioned analyses bragging about cost benefits, because that clearly is not reflected by what stakeholders are telling us now.2020-07-15View Hansard
2.32 pmMr BOOTHMANMixed

Agreed everyone deserves to be paid for a fair day's work but raised concerns about extra red tape and paperwork burdening mum-and-dad builders, and criticised the QBCC as a toothless tiger.

Everybody deserves to get paid for a fair day's work. LNP members and I am sure government members all agree with this.2020-07-15View Hansard
2.37 pmHon. MC de BRENNISupports

Replied as minister, defending the phased approach to reform and citing support from trade subcontractor associations who called the reforms 'the biggest step forward on subbie payments in our nation's history'.

We are saying this to tradies across Queensland: you deserve to get paid in full, on time every time; you deserve the certainty of getting paid for the work that you do and you deserve a system that will not let you down.2020-07-15View Hansard
In Detail14 July 2020 – 15 July 2020View Hansard
Government amendmentPassed

Government amendments Nos 1 to 60 implementing committee recommendations, including: commencement by proclamation to allow phased introduction; revised definitions of project trust work and protected work; streamlined trust account frameworks; anti-avoidance measures for contract splitting; exemptions for professional design and advisory contracts; new definition of fire protection work and fire protection equipment; provisions for transitioning existing project bank accounts; new licence conditions for new licence classes; validation of fire collar installation work; statutory review of the role of property developers; and various typographical and drafting corrections.

Moved by Hon. MC de BRENNI
Third Reading15 July 2020View Hansard
Royal Assent — Act 24 of 202015 Feb 2018View Hansard

Assent date: 27 October 2017

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