CONSTRUCTION ALERT: Queensland State Government’s Parliamentary Committee gives the Building Industry Fairness (Security of Payment) Bill 2017 the go-ahead with minimal recommendations for change

13 October 2017

Publications

On Friday last week, the Public Works and Utilities Committee, the Queensland State Government’s committee tasked with reviewing the Building Industry Fairness (Security of Payment) Bill 2017 (BIF Bill), has tabled its findings in Parliament.  Click here to read the report in full.

In short the committee has recommended the Bill be passed with very few recommendations for amendment.

Committee’s recommendations

The committee has made the following seven recommendations only:

Recommendation 1 The committee recommends the Building Industry Fairness (Security of Payment) Bill 2017 be passed.
Recommendation 2 The committee recommends that the Minister consider ensuring the review of phase 1 of the Project Bank Account provisions commence at least three months prior to commencement of phase and be undertaken in consultation with representatives of the building and construction industry.
Recommendation 3 The committee recommends that the Minister review the appropriateness of the proposed imprisonment penalties for a number of new offences contained in the bill.
Recommendation 4 The committee recommends that the Minister consider amending the bill to require the QBCC to provide licensees with the opportunity to rectify the building work, within a specified timeframe, before a direction to rectify is issued and a demerit point penalty is applied.
Recommendation 5 The committee recommends the Minister consult with the building and construction industry when developing the regulation that will mandate and prohibit certain conditions for building contracts and with regard to any subsequent amendments to the regulation.
Recommendation 6 The committee recommends that the Minister report to the House during the second reading speech on those issues raised by stakeholders about the Bill where the department indicated it would undertake further consideration.
Recommendation 7 The committee recommends that the Minister in his second reading speech provide examples of any proposed regulations that he intends to make should the bill be passed.

The recommendations for the most part are general and do not require any actual amendment to the BIF Bill from its current form.  The exception to this is recommendation 4.  Recommendation 4 pertains to sections 272 to 274 of the BIF Bill which in its current form will require the QBCC to automatically issue a penalty to contractors where they are issued with a direction to rectify defective building work.  The committee in its recommendation acknowledged that the automatic penalty is overly harsh given it penalises contractors who are otherwise willing to rectify defects prior to them having to opportunity to perform the rectification works.

Another feature of the report is that there are no recommended changes to the provisions dealing with project bank account (PBA).  The committee acknowledged that industry concern is high but ultimately found that implementation of PBAs is the best way to determine the legitimacy of those concerns.  It follows that from 1 January 2018, all government building and construction projects between $1million and $10million, excluding engineering projects (infrastructure such as bridges, roads and ports) will require PBAs.

What now?

This report is a significant step in the legislative process and largely clears the way for the BIF Bill to be passed into law in Queensland.  All building and construction industry stakeholders should take note and remain alert to updates in order to determine when the BIF Bill is passed (if it is, which appears likely).

If you are concerned over any aspects of the BIF Bill, please contact Andrew Kelly or Tom McKillop.  We are currently offering complimentary education on the BIF Bill and its effects.

Written by:

Andrew Kelly | Partner | +61 7 3338 7550 | akelly@tglaw.com.au

Tom McKillop | Senior Associate | +61 7 3338 7530 | tmckillop@tglaw.com.au