Building reforms hit the nail on the head for subcontractors

The next stage of the Palaszczuk Government’s landmark building industry fairness reforms comes into effect today (17 December 2018), with changes that streamline systems to ensure everyone working in the building industry is paid in full, on time, every time.

Housing and Public Works Minister Mick de Brenni said the changes help level the playing field for subcontractors and suppliers to the construction industry.

“This is about faster progress payments and quicker adjudications, so the 230,000 Queenslanders working in our $46 billion building and construction industry feel confident about payment protections,” Mr de Brenni said.

“The latest changes mean all payment claims and invoices for construction work and related supplies and services will be protected under the BIF Act.

“Respondents now have to respond to every payment claim – either paying in full by the due date or issuing a payment schedule stating what they will pay by that date.

“A payment schedule must be provided within 15 business days, or the time provided in the contract, with heavy penalties in place for failing to do so. This will give claimants cash flow certainty for their business.”

Penny Cornah, Executive Director of Master Plumbers’ Association of Queensland said she welcomed these reforms to ensure her members are paid on time.

“Reforms like this give confidence to our members that they will get paid for the materials they buy and the work they do.”

Mr de Brenni said changes to the independent adjudication system would streamline and speed up the issue resolution process.

“We are removing the ability to provide a ‘second chance’ payment schedule, so the claimant can proceed straight to adjudication to receive monies owed,” he said.

“Adjudicated amounts must be paid within five business days or another time decided by the adjudicator. Previously, there was no penalty if payment wasn’t made, but now a maximum penalty of $26,110 applies.

The latest reforms look to simplify the law relating to subcontractors’ charges provisions, so contractors were required to respond within 10 business days or risk fines.

“They also amend the Queensland Building and Construction Commission Act to ensure subcontractors are aware when defects liability periods end, and retention monies are due,” Mr de Brenni said.

“It will be an offence if a higher contractor does not pay retention money, unless there is a reasonable excuse.”

Other reforms relating to Minimum Financial Requirements of contractors come into effect 1 January 2019.

“These will strengthen financial reporting requirements, provide greater transparency, and better equip the QBCC to detect and mitigate the impact of potential insolvencies and corporate collapses,” he said.

“These changes are part of the Palaszczuk Government’s ongoing commitment to security of payment in the building and construction industry.”

The latest reforms follow on from the establishment of a trust account system for state government building projects valued between $1 million and $10 million, known as Project Bank Accounts.

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