Subcontractors have questioned why new building industry reforms will take two years to implement. PHOTO: FILE
Subcontractors have questioned why new building industry reforms will take two years to implement. PHOTO: FILE

Payment rule rollout angers subbies and builders

SUBCONTRACTORS have questioned why legislation introduced into the Queensland parliament to provide them greater payment security will take two years to roll out.

The State Government has acted to put an end to more than a decade of building company collapses that have impacted thousands of unsecured subcontract creditors left unpaid hundreds of millions of dollars for material and labour.

Subcontractors Alliance head Les Williams said all licence classes from Category 3-7 have, since December 31 last year, had to comply with new minimal financial requirement legislation.

All that was now required, he said, was for builders to set up project trust accounts to quarantine money owed to subcontractors for work done and materials supplied.

Mr Williams has questioned the Housing and Public Works Minister Mick de Brenni's claim that if the new arrangements were switched on tomorrow businesses would collapse, also impacting a pipeline of work for subcontractors.

"They've had a trial period, identified all the problems and there were 20 recommendations to simplify it," he said.

"I find it incomprehensible.

"The hard part was the new minimum financial requirements.

"The major part of compliance has been done.

The legislation has also faced criticism from Master Builders Queensland but for different reasons.

It has claimed the scheme would add costs at a time its members faced a tough 2020 after a difficult 2019.

Mr de Brenni introduced building industry fairness legislation on Wednesday which would require the trust accounts to be applied from July 1 to all eligible government and health and hospital services' building contracts of $1 million or more.

From July 1, 2021, the protections will be extended to the private sector and local government for building contracts valued from $10 million and then from January 1, 2022 they will be required for those worth $3 million or more.

All contracts valued from $1 million will then not be covered until July 1, 2022.

Master Builders Deputy CEO, Paul Bidwell, said statistics from 2019 painted a clear picture of a tough year for the industry, with the forecast for 2020 looking equally as tough.

He said the legislative reforms would have an impact and contribute to rising costs.

"The industry has also been subjected to a wave of regulatory reform that by and large has had a massive negative impact, creating a high level of unrest among the industry in general," Mr Bidwell said.

"The revamped minimum financial requirements that Queensland's building businesses need to meet are causing grief for tens of thousands of licensees.

"It remains to be seen whether these businesses can comply with the new laws by the end of 2020 and what action the building regulator takes against those who can't."