Building Industry Fairness (Security of Payment) and Other Legislation Amendment Bill 2024
Plain English Summary
Overview
This bill clarifies and simplifies Queensland's security of payment framework for the building and construction industry, which protects subcontractors from late or non-payment through project trust accounts and retention trust accounts. It also implements governance reforms for the QBCC and makes minor improvements to licensing and regulatory processes across six Acts.
Who it affects
Subcontractors, head contractors, and QBCC licensees in the building and construction industry are most affected. Subcontractors gain clearer payment protections, while head contractors benefit from simplified compliance requirements.
Key changes
- Clarifies which subcontractors are protected by project trust accounts by linking beneficiary status to licensing requirements, rather than requiring complex assessments of work type
- Confirms that retention trust amounts must include GST, closing a gap that could leave subcontractors short-changed in an insolvency
- Broadens who can audit trust accounts to include registered accountants (not just registered auditors), reducing costs and addressing auditor shortages
- Allows QBCC licensees to surrender a specific licence class without having to give up and reapply for their entire licence
- Reduces the QBC Board from 10 to 7 members and requires publication of a conflict of interest register
- Extends QBCC internal review timeframes from 28 calendar days to 28 business days, giving reviewers adequate time over holiday periods
Bill Story
The journey of this bill through Parliament, including debate and recorded votes.
▸Committee14 Feb 2024View Hansard
Referred to Housing, Big Build and Manufacturing Committee
The Housing, Big Build and Manufacturing Committee examined the bill over several weeks, receiving nine written submissions and holding public hearings with industry stakeholders including Master Builders Queensland, the Housing Industry Association, and the Queensland Small Business Commissioner. The committee recommended the bill be passed, finding the amendments to the project trust account framework would strengthen payment security for subcontractors in the building and construction industry. While most amendments received broad support, the treatment of GST in retention accounts drew mixed feedback from industry, with several bodies raising concerns about cash flow impacts. Two opposition members filed a statement of reservations citing ongoing concerns about the framework's practical effectiveness.
Key findings (5)
- Industry stakeholders broadly supported measures to clarify who qualifies as a subcontractor beneficiary and to simplify trust account record keeping and audit requirements.
- The treatment of GST in retention accounts was contentious, with Master Builders Queensland, UDIA Queensland, and the Property Council of Australia raising concerns about cash flow impacts and inconsistency with existing ATO tax rulings.
- The department confirmed it had engaged an independent taxation expert to consult with the ATO on the GST retention provisions and would implement targeted education for industry.
- Amendments to reduce the QBCC board from 10 to 7 members and publish a conflict-of-interest register were supported and formalise arrangements already in place since late 2022.
- Opposition members noted that despite the trust account framework, no subcontractors had been paid from a trust account following at least four head contractor insolvencies as at early March 2024.
Recommendations (1)
- The committee recommends the Building Industry Fairness (Security of Payment) and Other Legislation Amendment Bill be passed.
Committee report tabled
▸Second Reading16 Apr 2024View Hansard
Focused on the building industry fairness bill, criticising the previous QBCC board as stacked with Labor allies with conflicts of interest. Supported the Varghese review recommendations to reform the QBCC and separate prescribing from regulating functions, but questioned whether project bank accounts effectively protect subcontractors.
“Everybody on this side of the House believes that subcontractors should be paid, should be paid on time and should be paid progressively.”— 2024-04-16View Hansard
As shadow minister for small business, argued the building industry fairness legislation fails to protect subcontractors when head contractors go into liquidation. Cited specific examples of builders PBS and NCM where subcontractors were not paid despite complying with security of payment legislation.
“Security of payment arrangements in Queensland are flawed. While this legislation improves some of the regulatory requirements around the regime, it does not address the fundamental failings of these arrangements.”— 2024-04-16View Hansard
Assent date: 14 September 2020
Referenced Entities
Legislation
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Sectors Affected
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