Project Bank Account Reforms

The Property Council has provided a submission to the review of the Queensland Government’s Project Bank Account reforms being conducted by the Building Industry Fairness Reforms Implementation and Evaluation Panel.

Practical improvements to the reforms have been proposed by the Property Council through the ‘5 Ways to Improve the PBA Model’ position paper. The Property Council has called on the Government to:

• Realign timeframes and penalties
• Rationalise the trust accounts
• Remove Principal supervision
• Allow greater flexibility in payments, and
• Defer full implementation

The Building Industry Fairness (Security of Payment) Act 2017 gave effect to the Queensland Government’s Project Bank Accounts (PBA) reform, aimed at safeguarding payments for subcontractors.

A PBA is a set of 3 bank accounts, operating as a trust, that will be required for each building contract: a general account, a retention account and a disputed funds account.

The Property Council has been a vocal opponent of the PBA reforms on the basis that they will create a significant new cost for construction sector without resolving the underlying issue of industry insolvencies. Particular concerns have been outlined by the Property Council in relation to new legal obligations and responsibilities on project proponents.

The reforms are being rolled out through a three-stage implementation process:

Stage 1: From 1 March 2018, projects tendered by the Queensland Government have used PBAs on building and construction projects (excluding engineering projects) valued between $1 million and $10 million. 100 PBAs have been established. 17 have been completed. Stage 2: The model will apply to private sector building and construction projects valued from $1 million. The implementation date for Stage 2 still needs to be proclaimed by the Government. The advertised commencement date for State 2 has been progressively revised from 1 January 2019, to 1 March 2019, and is now noted as ‘not before 1 March 2019’.
Stage 3: Potential future application beyond the first tier of sub-contractors.

The Review Panel will provide its recommendations to Minister de Brenni at the end of March 2019. The Minister has advised that he will consider these recommendations prior to proclaiming the start of Stage 2.

The Property Council has recommended that the Government postpone the full implementation date until at least 1 March 2020, to provide much needed clarity and to enable an appropriate lead time for industry education on obligations under the final framework.

Factsheets and FAQs on the PBA reforms are available from the DHPW website.

The Property Council’s PBA position paper can be accessed below. 

Special Joint Taskforce appointed to investigate construction company collapses

The State Government this week announced the appointment of a Special Joint Taskforce to investigate the circumstances surrounding the collapse of a number of major Queensland construction companies.

The taskforce will be headed by retired Supreme Court Judge Justice John Byrne and comprise Queensland Police Service detectives, investigators from the Queensland Building and Construction Commission and prosecutors from the Office of the Director of Public Prosecutions. The taskforce will consider if there are sufficient and appropriate investigative and supervisory powers to deal with illegal conduct.

The Minister for Housing and Public Works advised the Parliament that the implementation of Stage 2 of the Building Industry Fairness reforms will be delayed until the findings of the Special Joint Taskforce can be considered by the Government.