Project Bank Accounts
What you need to know
Earlier this year we delivered our response to the Queensland Building Plan, which contains some dramatic changes proposed by the state government to shake up the industry. In response to that consultation process, the government has introduced a broad ranging bill with the primary intent of improving security of payment for subcontractors.
If passed, the legislation will bring about the introduction of project bank accounts and affect changes to BCIPA, subcontractor charges, retentions, contracts, unlicensed building work, directions to rectify, phoenixing and minimum financial requirements.
We maintain our stance on why aspects of the bill, particularly Project Bank Accounts won’t work. You can read more about the legislation in detail, our stance on Project Bank Accounts below and why they won't work, or explore our proposed solutions.
Have your say
If you're passionate about Project Bank Accounts, contact your local MP to have your say.
Project Bank Accounts don't work on any level
Despite what the Queensland Government is promising, Project Bank Accounts aren’t going to work and they won't guarantee payment for subbies or builders. It’s a rush job that’s too complex and the details aren’t complete.
In its current form, the initiative will create more red tape, restrict cash flow, make payment terms longer, increase costs to builders and subcontractors and make housing and construction more expensive.
Worse still, Project Bank Accounts won’t cover the entire building chain, leaving many businesses, like suppliers and sub-subcontractors completely exposed.
The administrative burden will be significant and the entire industry will be required to change their payment mechanisms for no protection of subcontractors or anybody else. There is no independent party assessing if the right payments are made out of the Project Bank Account because the builder is the only party determining who gets paid and how much.
They also won’t be of any assistance if payments are in dispute or if owners don’t pay money into the Project Bank Account.
Project Bank Accounts are the wrong regulatory response – they’ll cost the industry and taxpayers money and will not help anyone in the industry to get paid.
We all agree something needs to be done to ensure fair, more reliable payment for builders, subcontractors, sub-subcontractors and suppliers. Any proposed solution must help everyone in the contractual chain and we can’t weed out bad payers in our industry by imposing a straightjacket on payments. We’ve offered some clear alternative reforms that focus on improving and enforcing mechanisms that are already in place.
Contact us for more information or to ask questions.