Social Housing Project in Nundah Among First Projects to Benefit from Project Bank Accounts

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In a move to ensure workers are paid in full and on time, the government has announced the first three projects to benefit from Project Bank Accounts. The projects include a social housing project in Nundah, a replacement Fire and Rescue Station in Richmond, and the Inala Community Centre.

An estimate of up to 180 construction workers will be protected by Project Bank Accounts. Minister for Housing and Public Works Mick de Brenni said that the implementation of the Project Bank Accounts helps in making sure that all subcontractors get the pay they deserve for the work they have completed.

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Security of Payment

Unfortunately, there are dishonest operators in the construction industry who use non-payment as a business model. Such act has caused some subcontractors to close business and workers have been left unpaid.


 


Because of this, the government has implemented Project Bank Accounts to ensure fairness in the payments. PBA ensures that all parties relevant to a project are paid on dates set out in the contract.

As a start, every project tendered by the Queensland Government from 1 March 2018 will use PBAs on building and construction projects that are valued between one million and 10 million dollars except for engineering projects.

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Once the implementation is proven successful, PBAs will also be applied to private sector projects valued one million dollars and above. Implementation on private sectors, however, will not be carried out before 1 March 2019.

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Project Bank Account

A PBA is basically a set of three bank accounts operating as a trust.

These are the General Trust Account where the Principal makes the payment, a Retention Trust Account which holds the subcontractor’s retention money, and a Disputed Funds Trust Account which holds amounts to be paid on certain disputes until resolution.

To address concerns from the industry, Mr de Brenni said that a strict compliance regime was also established to make sure that funds in the PBAs will only be used to pay licensees that have performed the work.

“That compliance regime includes penalties up to 2 years in prison,” he added.

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This is just one of the measures taken by the government to address the issues on unpaid and overdue invoices for subcontractors. Queensland’s new Building Industry Fairness (Security of Payment) Act 2017 has been, by far, the strongest protection for building subcontractors offered by a state government in Australia.

For the requirements and other information regarding PBAs, visit the Department of Housing and Public Works Building Industry Fairness Reforms—Project Bank Accounts official page. You may also visit the Security of Payment page to learn about other measures under the new Act.