Desperate subbies: Bring red tape back to industry

Les Williams from WK Civil is leading the fight to have subcontractors paid for the work they did for collapsed builder Walton Constructions.
Les Williams from WK Civil is leading the fight to have subcontractors paid for the work they did for collapsed builder Walton Constructions. Brett Wortman

GIVE us more red tape is the message from the Queensland Master Builders Association after it failed to resist LNP Newman government reforms in 2014 that reduced minimum financial reporting requirements for the state's troubled construction sector.

A series of construction company collapses since the Newman-era reforms became law on October 1, 2014, have led to unsecured small business creditors left owed more than $300 million, according to the Subcontractors Alliance.

The reforms were introduced on the basis they would cut red tape and save builders money almost a year to the day after the Walton Construction liquidation left a trail of $80 million in unpaid bills across four states, including $30 million in Queensland.

QMBA Deputy CEO Paul Bidwell, speaking after 2017 started with a further string of construction company collapses, said his organisation had held meetings with new Queensland Building and Construction Commission Commissoner Dick Williams seeking the re-introduction of stiffer financial reporting requirements.

Mr Bidwell said the QMBA had not argued when the Newman government introduced the weaker financial reporting requirements which effectively allowed self-certification instead of the annual provision of externally audited complete accounts and records.

"We shrugged our shoulders," Mr Bidwell said. "It was doing away with red tape. In hindsight that was wrong."

He said the QBCC wanted regular reporting brought back and would work with the QBCC to see how that would work.

Mr Bidwell said the industry needed compulsory professional development and the bar had to be lifted on licensing requirements and contract management.

However the QBMA will argue vigorously against the Palaszczuk Labor government's proposed Queensland Building Plan which has at its centre project bank accounts meant to provide security of payment by quarantining money owed to subcontractors who provide the labour and materials to construction projects.

It will resist those changes on the basis they are complex and will increase cost and red tape.

Mr Bidwell said security of payment was the most important and serious issue facing the industry, but the State Government's project bank account proposal would not provide a workable solution for any sector of the industry.

He said it was a political promise that won't solve payment issues, but would create more red tape, negatively impact housing affordability and cause construction costs to rise, making building more expensive as a result.

The QMBA argues the level of complexity would be too high and would create an administrative burden that offered no benefit to builders or subbies and could delay payments further or even mean the end for some small businesses.

It instead wants to weed out bad payers, be they developers/owners, builders or subcontractors, by cracking down on those individuals who do the wrong thing. 

The QMBA has called on the government to improve and use existing mechanisms including the enforcement of legislation that says that payment terms under a subcontract that exceed 25 business days are void and the use of written contracts.

It wants dispute resolution mechanisms (currently the BCIPA legislation) made fairer for everyone and easy to use and by making it possible for builders to use the legislation to get owners to pay what builders are due under contract.

Among a raft of proposals it will also ask that the QBCC to do regular and thorough checks on the financial viability of licensed builders and subcontractors and reintroduce contractor reporting on meeting the Minimum Financial Requirements.

Topics:  palaszczuk government paul bidwell security of payment

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