20 March 2023
Queensland’s builders have welcomed the Queensland government’s decision to delay the further rollout of Project Trust Accounts (PTAs) into the private sector for contracts over $3 million from 1 April 2023 to 1 March 2025, and for contracts over $1 million from 1 October 2023 to 1 October 2025, but we remain sceptical that PTAs will be the silver bullet for security of payment.
The delay comes at a time when the industry is grappling with a multitude of issues and we’ve been cautioning the Queensland Government that adding more red tape and extra costs to do business in the current climate could push some over the edge.
Master Builders has always supported prompt payment for everyone in the contractual chain. No one should go unpaid for the work they do – and whether you’re a subcontractor or a builder, everyone knows cashflow can make or break a business.
Since PTAs were put on the table, we’ve had concerns that the framework is too complex and burdensome, and we advocated hard at the time against their introduction.
We don’t believe PTAs are likely to provide the protections they are advertised to provide, due to the difficulty of legislating a complicated and onerous trust framework for a project account.
We’ve opposed them from the beginning, back in 2017, and don’t believe they should be rolled out any further. Last year we successfully pushed for a delay in their rollout to lower value projects because the administrative burden is particularly onerous on smaller businesses.
There are just too many costly administrative requirements that are very difficult to comply with, without providing the protection they’re designed to give. Financiers and accountants are also reporting cashflow problems that PTAs are creating.
Research commissioned by the Queensland Government has also revealed there are no current compliant software solutions that meet the requirements of the framework, meaning small businesses are having to engage more staff to manually carry out the administrative tasks for every project with a PTA.
While we understand there are some software solutions currently being developed, at a proposed cost exceeding $40,000, that’s far too expensive for small business builders to take on.
With a win on PTAs under our belt, next step is addressing the problems with the looming Livable Housing and Energy efficiency changes in the National Construction Code (NCC) to be introduced from 1 October 2023.
It is important to note that Project Trust Accounts continue to apply to state government (including hospital and health service) projects with a project value of $1 million or more, and all projects (including private sector and local government projects) with a project value of $10 million or more.
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