Building company says subbie payment rules falling short
THE boss of one of Toowoomba's largest construction companies called on the Queensland Government to rethink its Project Bank Account rules.
The new rules, which came in effect last year, require companies to set up a series of trust accounts to hold payments for sub-contactors. If the builder goes bankrupt, the contractors will still get paid.
While a good idea in theory, Northbuild regional manager Andrew Civil said the program did not go far enough to protect sub-contractors yet created burdensome administration costs and only applied to government projects.
"We are currently doing a project for TAFE and we are the first company in Toowoomba to use the system," he said.
"The Project Bank Account rules are only for jobs between $1-5 million. I think that is too small, my view is it should be for larger projects.
"That is where risks for subcontractors are much higher.
"There is a lot of paper work that needs to be dealt with and the time frames are much more critical. If you are late you can get fined."
Mr Civil is concerned the rules only apply to the first layer of sub-contractors.
"In theory payments could go the main sub-contractor and they may not pay the people down the chain," he said.
The state government is trialing the rules on the small, state-funded projects and Mr Civil said there were plans to roll it out to private contacts.
"If it did it would add costs to all our projects because we would need additional administration staff," he said.
"It does take more work to process payments month by month and I have heard stories that some builders have had to change bank accounts because they were not able to service the accounts."
Despite the teething problems Mr Civil said expanded laws would be welcomed by the industry
"Only if it did protect the sub-contractors but we need some data from these first projects before they rush in and make it industry wide."