Security of payment discussion paper
The Queensland Government has released a discussion paper seeking community and industry feedback on security of payment for subcontractors.
The Property Council supported changes made to the Building and Construction Industry Payments Act 2004 in 2014, which sought to close a number of loopholes and rebalance the responsibilities of parties involved in the claim process.
This discussion paper forms part of the Palaszczuk Government’s election commitment to review Queensland’s arrangements for how subcontractors are paid.
Five options for securing payments throughout the contractual chain have been proposed in the discussion paper:
- Option 1″Project Bank Accounts: A project bank account facilitates simultaneous payments of a project’s head contractor and all participating subcontractors through a trust arrangement.
- Option 2″Retention Trust Fund Scheme: This option requires subcontractors’ retention money to be held in a separate trust account.
- Option 3″Insurance schemes: This option includes a range of insurance schemes to safeguard against defects, late completion and insolvency of contractors.
- Option 4″Federal legislative changes: This option seeks to lobby the Commonwealth government for reform to Commonwealth legislation relating to security of payment.
- Option 5″Education: This option proposes education for the building and construction industry stakeholders regarding matters such as financial management and business management.
As several of these options will have a significant impact on members’ operations, the Property Council is working closely with the Government to ensure that the legislation retains an appropriate balance of responsibilities between parties.
Input on the discussion paper can be provided to the Government through an online survey or via written submissions. Consultation sessions are also being run throughout February and March.
The consultation period concludes on 31 March.