Project trust accounts Queensland: update March 202231 March 2022
As we mentioned in our recent article , the project trust account framework is being rolled out progressively in Queensland under the amendments made to the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) by the Building Industry Fairness (Security of Payment) and Other Legislation Amendment Act 2020 (Qld) (BIFOLA).
Like many other industries, the building industry has been hit hard recently between COVID, floods, labour shortages, razor thins margins and soaring materials costs. Industry players therefore approached the Queensland Government to ask for a delay in implementing the BIFOLA changes.
Queensland Minister for Energy, Renewables and Hydrogen and Minister for Public Works and Procurement, Mick de Brenni has recently announced that following consultation with the industry, it has become clear that smaller contractors need more time to implement the regime.
The Minister is therefore delaying the roll out of the next two phases by around ten months, as follows:
|1 March 2022||Applies to eligible state government contracts valued between $1 million and $10 million (excluding GST), which were “tendered” from 1 March 2021.|
|1 July 2021||Applies to eligible government and Hospital and Health Services contracts valued at $1 million or more (excluding GST), which were “tendered” from 1 July 2021|
|1 January 2022||Applies to the eligible private sector (see eligibility criteria below), local government, statutory authorities’ and government-owned corporations contracts valued at $10 million or more (excluding GST) and executed on or after 1 January 2022.|
|1 July 2022 moves 1 April 2023||Applies to eligible private sector, local government, statutory authorities’ and government-owned corporations contracts valued at $3 million or more (excluding GST) and executed on or after 1 July 2022.|
|1 January 2022 moves 1 October 2023||All eligible building and construction contracts valued at $1 million or more (excluding GST) and executed on or after 1 October January 2023 and subcontractors working on project trust account projects that hold cash retentions, will also need a retention trust account.|
We understand that the remainder of the changes made by BIFOLA to the project trust account regime remain as previously announced.
While many in the industry will breathe a sigh of relief, it must be stressed that this is just a postponement. All contractors on eligible projects (see our previous article) will still need to get to grips with this legislation and should be thinking about doing it sooner rather than later. Implementing these changes can have effects across your business and it will take time to set them up and train your people. Ten months seems like a long time, but it will disappear very quickly if the last two years are anything to go by.