Stepping up the fight against PBAs
Published: 4 October 2017
Master Builders has launched the next round of a campaign fighting the Queensland Government and Housing & Public Works Minister, Mick de Brennis’s, Building Industry Fairness Bill, tabled in parliament earlier this month.
Master Builders CEO, Grant Galvin says the legislation, which is believed will be debated in parliament in coming weeks will really pack a punch for the building industry, but not in a good way.
“Project Bank Accounts are the headline act of a bill that does have some positive elements for our industry that we support; but Project Banks Accounts are not one of them,” Mr Galvin said.
“Contrary to what some industry punters and the Minister are saying, Project Bank Accounts will not provide security of payment for anyone in the industry – certainly not subbies. And it’s for this reason that it’s time to take off the gloves and come out swinging.
“We’ve used all the right channels to explain why Project Bank Accounts and other concerning elements within the bill will not work and why they are going to be a disaster for builders, subbies and sub-subbies.
“We ran an advertising campaign earlier this year and have participated in every government feedback opportunity – including providing a submission from our contractual law experts who have explained in detail the problems, but more importantly, our proposed solutions.
“However, it has become pretty clear that the Minister will not take on board our advice on this issue. So, we’re taking the unprecedented step of a high-vis outdoor campaign in the Minister’s electorate.
“It’s a bold move for us – we’re just a moderately conservative membership association, but the stakes are so high on this issue, it’s a fight we need to have.”
Master Builders is encouraging all building industry participants who are passionate about this issue to contact their local MP.
Why Project Bank Accounts won’t work
It's a very complex issue and easy to see why Project Bank Accounts look good in theory. However, there are a few fatal flaws that could prove disastrous for the building industry and will mean subbies won't get the security they are being promised:
- Builders will still have complete control of the Project Bank Accounts, leaving subcontractors exposed to unscrupulous builders
- Subcontractors will still need to prove (in court) they are owed money before getting paid out of the retention PBA if the builder goes under
- Builders can withdraw all retention moneys at any time
- Project Bank Accounts will not deal with disputed funds
- Project Bank Accounts won't mean subbies get paid in the event of insolvency.
The bill also contains a number of other elements that will create unreasonable cost and administrative burden (not to mention removing claimant's rights) for no benefit, including some big changes to how payment claims and payment schedules work and demerit points for directions to rectify.
We recognise there isn't one single fix, which is why we're recommending a multi-pronged approach that proposes a range of alternative solutions that benefit EVERYONE (including subbies) in the contractual chain.
Our recommendations range from reintroducing reporting on Minimum Financial Requirements, simplifying the available dispute resolution mechanisms so they are fairer and easier to use, through to providing resources and better education to contractors and enforcing existing requirements, such as the use of written contracts.
At the very least, if the legislation is passed, we urge the government to add in a review clause that will ensure Project Bank Accounts and their impact on government projects are evaluated at the end of 2018, prior to introducing them more widely.