$2.9 million on the Nambour Coles project.
$2.9 million on the Nambour Coles project. Warren Lynam

Subbies doubt the intent of govt fix

THE Queensland Government will examine the establishment of project banks to better protect subcontractors from defaulting builders, as part of a suite of matters to be considered in a discussion paper.

However, subcontractors remain sceptical about the government's intent, and Member for Nicklin Peter Wellington has called on the government to get amendments to the legislation into Parliament before the next state election.

The calls for construction industry changes have escalated following the $91 million collapse of Walton Constructions Pty Ltd in October last year and the more recent failure of Glenzeil Pty Ltd.

On the table are measures aimed at better protecting unsecured trade contractors, who Housing and Public Works Minister Tim Mander (pictured) concedes are at the bottom of the chain in the industry's cascading payment system and often the hardest hit in disputes.

Coast subcontractors on the Nambour Coles project lost $2.9 million when Waltons went bust last year.

"Earlier this year the government updated the Building and Construction Industry Payments Act (BCIPA) to set up a one-stop shop within the QBCC and make the whole process simpler and more transparent than ever before,'' Mr Mander said.

"We've also introduced tougher penalties for people who don't pay their subbies. Now we're looking to explore other options to help improve payment outcomes for subbies and boost confidence in the sector."

This month the Queensland Building and Construction Commission Financial Requirements for Licensing policy was replaced with the Minimum Financial Requirements policy, which includes an asset test for builders as well as a minimum liquidity ratio, maximum revenue limits and financial monitoring requirements.

There is now provision for builders or trade contractors to lose their licences for non-payment of accounts.

The suite of measures to be considered include trust funding of retention payments to ensure they are not caught up in a builder's liquidation or insolvency, and the establishment of project banks to ensure money paid by a client to a contractor is retained for the intended project.

Subcontractors' Alliance head Les Williams, of Coolum, said any legislative change that improved security of payment was welcome, but subbies remained sceptical about the government's intent given their disappointment with recent changes to the BCIPA.

"It is our opinion that the review and subsequent recommendations were not independent and that the changes only weaken subcontractors' position,'' he said.



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